Who Performs FHA Appraisal

If an appraiser is removed from the FHA Appraiser Roster, they are no longer eligible to perform appraisals for FHA-insured mortgages. A lender cannot select an appraiser who is suspended, debarred, or otherwise excluded from participation in HUD programs. Appraisers must renew their state certifications and maintain good standing to remain on the roster. If they fail to renew in a timely manner or are subject to disciplinary action by a state licensing board, they can be removed. Lenders must check the roster and the Limited Denial of Participation (LDP) list to ensure the appraiser is eligible before assigning a case.

An FHA appraiser must analyze the property’s compliance with Minimum Property Requirements (MPR) and Minimum Property Standards (MPS). This professional must identify “readily observable defective conditions” that affect the health and safety of occupants or the structural soundness of the dwelling. Examples include checking for lead-based paint in pre-1978 homes, ensuring utilities are operational, and verifying that the roof has at least two years of remaining life. If the appraiser cannot determine if a system is safe or functional, they must recommend a detailed inspection by a qualified third party, such as a structural engineer or electrician.

Yes, FHA appraisers are professionals who must operate with strict independence and are obligated to report any attempts to influence their valuation. Prohibited acts by lenders or third parties include withholding payment, threatening future business, or providing a target value to hit. If an appraiser faces such pressure, they are required to report these attempts to the FHA Resource Center or the HUD Office of Inspector General (OIG). This reporting requirement ensures the integrity of the FHA insurance fund by protecting appraisers from coercion that could lead to inflated property valuations and increased risk of default.

FHA appraisers must adhere to the Competency Rule of the Uniform Standards of Professional Appraisal Practice (USPAP). This means the professional must be knowledgeable not only about FHA-specific appraisal requirements but also about the specific market area where the assignment is located. If an appraiser is not geographically competent or lacks experience with a specific property type, they must decline the assignment. For example, if a property involves a unique feature or a complex market, the appraiser must have the education and field experience necessary to produce a credible value opinion before accepting the job from the lender.

Yes, a lender may utilize an Appraisal Management Company (AMC) to facilitate the selection and management of the appraiser. However, the professional selected by the AMC must still be an eligible FHA Roster Appraiser. The lender remains responsible for ensuring that the AMC complies with FHA guidelines, including paying the appraiser a fee that is customary and reasonable for the market area. The lender must also ensure that the AMC does not compromise the appraiser’s independence or pressure them to arrive at a predetermined value. The ultimate responsibility for the quality of the appraisal remains with the lender.

While an FHA appraiser must observe the property to ensure it meets Minimum Property Requirements (MPR) regarding safety, soundness, and security, they are not home inspectors. An FHA appraisal is a valuation tool for the lender, whereas a home inspection is a comprehensive examination of the home’s condition for the buyer. The FHA explicitly states that the appraiser’s observation is limited to “readily observable conditions” and is “not as comprehensive an inspection as one performed by a licensed home inspector.” Consequently, FHA guidelines require lenders to provide borrowers with a disclosure form advising them to get a separate home inspection.

The FHA Appraiser Roster is a specific list maintained by the Department of Housing and Urban Development (HUD) of appraisers authorized to perform appraisals for FHA-insured mortgages. Being on this roster is a mandatory requirement; a lender cannot accept an appraisal for an FHA loan if the appraiser was not listed on the roster at the time of the assignment. To get on this list, an appraiser must submit an application electronically through the FHA Connection (FHAC) system, prove their state certification, and certify that they understand and will comply with the FHA Single Family Housing Policy Handbook.

No, a borrower is prohibited from selecting the appraiser. To ensure the integrity of the valuation process and avoid conflicts of interest, the Mortgagee (lender) or a designated third party, such as an Appraisal Management Company (AMC), must select and retain the appraiser. FHA guidelines strictly prohibit the appraiser from being selected, retained, managed, or compensated by a mortgage broker or any member of a lender’s loan production staff who is compensated based on the successful completion of the loan. This separation ensures the appraiser remains independent and is not unduly influenced to hit a specific value target.

To qualify for the FHA Appraiser Roster, a professional must be a state-certified residential appraiser or a state-certified general appraiser. Mere state licensing is often insufficient; the credential must be a “certification” based on minimum criteria issued by the Appraiser Qualifications Board. Furthermore, the professional cannot be suspended, debarred, or otherwise excluded from participating in HUD programs. They must not appear on HUD’s Limited Denial of Participation (LDP) list or the Credit Alert Verification Reporting System (CAIVRS). Additionally, they must maintain their certification in all states where they perform appraisals and cannot be subject to any current loss of standing.

An FHA appraisal must be performed by a professional known as an FHA Roster Appraiser. This individual must be listed on the FHA Appraiser Roster and the Appraisal Subcommittee’s (ASC) National Registry. The Federal Housing Administration (FHA) mandates that Mortgagees (lenders) only select appraisers from this specific roster to conduct appraisals for FHA-insured financing. To be eligible for this roster, the professional must meet strict licensing and certification criteria set by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation. Essentially, not just any licensed appraiser can perform these valuations; they must have received specific approval from HUD.