H.R. 6025: Appraisal Industry Improvement Act

This bill, known as the Appraisal Industry Improvement Act, aims to make changes to the National Housing Act, specifically around the process and standards for appraisals related to mortgages insured by the Federal Housing Administration (FHA). Here are the key points of what the bill proposes:

Appraisal Standards

The bill amends the requirements for appraisers who conduct appraisals for properties that will secure FHA-insured mortgages. It introduces several key changes:

• Certification and Licensing: Appraisers must be licensed or certified in the state where the property is located. Federal employees who perform appraisal tasks must be licensed in only one state to conduct these appraisals across all states.
• Education Requirements: Appraisers must meet competency requirements and demonstrate formal education about the FHA's appraisal standards. This education can be provided by the FHA or approved third parties.

Compliance Requirements

No appraiser can conduct an FHA-related appraisal unless they fulfill the updated education and competency requirements outlined in the bill. This includes:

• If an appraiser was not previously approved by the FHA, they must comply with the new educational standards established by this bill.
• The effective date for these compliance requirements will be established by the Secretary of Housing and Urban Development, along with guidance on how appraisers can demonstrate compliance.

Annual Registry Fees

The bill allows the Appraisal Subcommittee to adjust annual registry fees for appraisal management companies, subject to Council approval. This change is intended to help support the functions under this act.

State Credentialed Trainees

The bill introduces provisions for State credentialed trainee appraisers, addressing:

• Inclusion of trainee appraisers in the national registry alongside licensed appraisers.
• Allowing certified appraisers to use trainee appraisers or unlicensed trainees in their work, while retaining overall responsibility for the appraisal’s integrity.

Education and Training Grants

The bill permits the Department of Housing and Urban Development to provide grants to various organizations to support education and workforce training in the appraisal field. This includes initiatives aimed at recruiting and retaining talent in the appraisal profession.

Involvement of Additional Agencies

Lastly, the bill amends the scope of the Appraisal Subcommittee to include additional agencies such as the Department of Veterans Affairs and the Rural Housing Service of the Department of Agriculture in overseeing appraisal policies.

Relevant Companies

• FB (Meta Platforms Inc.): Changes in appraisal standards could affect real estate investment strategies.
• AMZN (Amazon.com Inc.): As a major player in various real estate endeavors, compliance with new appraisal standards could impact its real estate divisions.
• PKG (Packaging Corp of America): Changes may influence real estate asset valuations affecting business operations.