Appraisal Provisions Included in the 21st Century ROAD to Housing Act

The recently passed 21st Century ROAD to Housing Act (H.R. 6644), now awaiting Presidential signature, includes two appraisal-focused measures supported by the Appraisal Institute: the Appraisal Industry Improvement Act and the Appraisal Modernization Act. Together, these provisions represent the most significant federal appraisal legislation enacted in several years and address workforce development, regulatory oversight, consumer protections, and appraisal modernization.

Appraisal Industry Improvement Act

The Appraisal Industry Improvement Act contains several provisions designed to strengthen the appraisal profession, modernize oversight, and expand pathways into appraisal practice.

Strengthening the Appraisal Subcommittee

The legislation enhances the authority and operations of the Appraisal Subcommittee (ASC), the federal agency responsible for monitoring state appraiser regulatory programs and appraisal management company (AMC) oversight. The bill updates the ASC's funding structure by revising National Registry fee provisions applicable to both appraisers and AMCs. These changes are intended to provide more stable funding for federal oversight activities and strengthen the ASC's ability to carry out its regulatory responsibilities.

Appraiser and AMC Registry Fees

The legislation revises provisions governing National Registry fees collected from state-certified and licensed appraisers as well as registered AMCs. These fees fund ASC operations and oversight activities. By modernizing the fee structure, Congress seeks to ensure that the ASC has sufficient resources to oversee state regulatory programs, monitor AMC compliance, and support the integrity of the national appraiser regulatory framework.

Entry into the Profession

The bill includes several provisions aimed at expanding the pipeline of new appraisers:

• Provides greater flexibility for trainee appraisers to obtain required experience.
• Encourages modernization of experience and supervision requirements.
• Supports alternative pathways for obtaining qualifying experience consistent with Appraiser Qualifications Board criteria.
• Promotes appraisal education and workforce development initiatives.

These changes are intended to reduce unnecessary barriers to entry while maintaining competency standards and public trust in the appraisal profession.

Expanded FHA Appraiser Eligibility and Training Requirements

One of the most significant appraisal provisions in the legislation concerns eligibility for the FHA Appraiser Roster.

The legislation would allow both state-certified and state-licensed residential appraisers to perform FHA appraisals, provided they complete FHA-specific education and satisfy applicable competency requirements. This change expands the pool of appraisers eligible to perform FHA assignments while maintaining a focus on understanding FHA's unique appraisal requirements.

Importantly, the legislation reaffirms a principle that has long underpinned the FHA roster program: appraisers performing FHA assignments should demonstrate knowledge of FHA-specific policies and procedures. FHA appraisals involve requirements that differ from conventional mortgage lending, including property eligibility standards, inspection and reporting obligations, and program-specific valuation considerations. The legislation emphasizes education and competency in these areas as a prerequisite for FHA roster eligibility.

The original intent of FHA roster reforms was to ensure appraisers possessed appropriate FHA-specific knowledge and training. Over time, that focus became less prominent as implementation centered primarily on credentialing requirements. The legislation seeks to restore the emphasis on competency and FHA program knowledge while expanding access to FHA appraisal work for qualified licensed residential appraisers.

The bill directs HUD to establish and administer the required FHA-specific education framework and implement the new eligibility standards. Existing FHA roster appraisers are expected to maintain their eligibility, while newly eligible appraisers would complete the required training before performing FHA assignments.

Proponents believe the change will help address appraiser shortages in some markets, improve access to FHA appraisal services, and expand opportunities for qualified appraisers without compromising appraisal quality or consumer protections.

Appraisal Modernization Act

The Appraisal Modernization Act focuses primarily on consumer protections and appraisal transparency.

Reconsideration of Value (ROV) Process

The legislation directs federal housing and financial regulators, including HUD, FHFA, USDA, and VA, to establish consistent standards and procedures for Reconsiderations of Value (ROVs) across the mortgage industry. The goal is to ensure that consumers have a clear, transparent, and standardized process for raising concerns about an appraisal, including potential factual inaccuracies, omissions, or other issues that may have affected the valuation conclusion.

By creating a more uniform framework, the legislation seeks to improve consumer confidence, promote consistency among lenders and loan programs, and provide appropriate avenues for review while preserving appraiser independence and professional judgment.

Second Appraisal Procedures

The legislation also directs federal housing and financial regulators to develop standards governing when and how a second appraisal may be obtained in connection with a mortgage transaction. The objective is to establish consistent consumer protections while discouraging inappropriate value shopping and preserving the independence of the appraisal process.

GAO Study of a Public Appraisal Database

The legislation directs the Government Accountability Office (GAO) to study the feasibility of creating a publicly available appraisal database. The study will evaluate the potential benefits, costs, operational considerations, and privacy implications of expanding public access to appraisal information. Congress intends for the study to assess whether such a database could improve market transparency, support research, and enhance regulatory oversight while protecting confidential borrower and property information.

Significance for the Profession

The appraisal provisions included in the 21st Century ROAD to Housing Act represent a comprehensive effort to address several longstanding issues facing the profession. The legislation seeks to:

• Strengthen federal and state appraisal oversight.
• Improve funding stability for the Appraisal Subcommittee.
• Modernize National Registry fee structures for appraisers and appraisal management companies.
• Expand pathways for new entrants into the profession.
• Increase access to FHA appraisal work while reinforcing FHA-specific competency requirements.
• Promote consistent, transparent consumer review processes for reconsiderations of value and second appraisals.
• Evaluate future opportunities for appraisal data transparency and market research.

Taken together, these provisions reflect growing congressional recognition of the critical role independent appraisers play in maintaining credible valuations, protecting consumers, and supporting the safety and soundness of the housing finance system.