Appraisal FHA & VA - Issue Summary
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| What is the fundamental issue? |
| The Federal Housing Administration and the Veterans Affairs Loan Guaranty Service have specific guidelines for the appraisal of residential properties subject to VA or FHA loans. The FHA requires, for example, that appraisers note the physical condition of a property's infrastructure--such as HVAC issues that are apparent during a physical inspection. In recent years, both the FHA and the VA have streamlined their appraisal processes as part of their efforts to make FHA and VA loan programs more attractive to consumers. However, H.R. 1723, the "Fair FHA Appraisals Act" would modify FHA appraisals by instituting a blind draw and increasing penalties for interference with the appraisal process. |
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| I'm a Realtor®. What does this mean to my business? |
| H.R. 1723 would create a blind draw for appraisals on real estate transactions insured by the FHA. This means that relationships that appraisers have with lenders would become meaningless as it pertains to FHA real estate transactions. |
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| NAR Policy: |
| NAR has policy supporting the independence of appraisals and the integrity of the appraisal process. |
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| Legislative/Regulatory Status/Outlook: |
| The issue of appraisal independence in connection with mortgage fraud will continue to garner attention in the 111th Congress. This type of appraisal language may become a part of legislation combating mortgage fraud. |
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