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November 21, 2018

Appraisal Institute Encourages FHA to Strengthen HECM Appraisal Program

The Appraisal Institute on Nov. 20 submitted a letter to Federal Housing Administration Commissioner Brian Montgomery in response to the FHA’s requirement in certain situations of a second appraisal for its Home Equity Conversion Mortgage program, asking that the FHA reevaluate eligibility requirements for placement on the FHA Appraiser Roster.
AI requested that the FHA ensure that appraisers on its roster have demonstrated “verifiable education” in FHA appraisal requirements as required by the Housing and Economic Recovery Act of 2008. The HERA Act also requires appraisers be certified to be on the FHA Appraiser Roster.
AI stated in its letter, “We continue to disagree with FHA’s decision to equate the minimum qualifications criteria of the Appraiser Qualifications Board with those agency specific requirements of the FHA, as was determined in 2008 in Mortgagee Letter 2008-39. The minimum qualification criteria of the FHA say nothing to a longstanding set of guidelines found in FHA Single Family Housing Handbook, 4000.1 and fail to advance the program goals of the FHA.”
Since the enactment of HERA, the Appraisal Institute has heard from AI professionals — reviewers in particular — that some FHA appraisers are not aware of the mere existence of the FHA Handbook, nor are they cognizant of the actual Handbook 4000.1 requirements.

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