H.R. 6025 — Appraisal Industry Improvement Act

This section revises qualifications for appraisers conducting appraisals of properties securing mortgages insured by the Federal Housing Administration (FHA) under the Mutual Mortgage Insurance Fund (MMIF). It requires such appraisers to (1) be certified or licensed by the state where the property is located (except federal employees with primary appraisal duties, who need licensure in only one state or territory); (2) comply with the competency rule of the Uniform Standards of Professional Appraisal Practice (USPAP) before accepting an assignment; and (3) demonstrate verifiable education in FHA appraisal requirements through an FHA- or approved third-party-provided course. Previously approved FHA appraisers are exempt from the education requirement, but all appraisers must meet these standards on or after the effective date to perform FHA appraisals. The Secretary of Housing and Urban Development (HUD) must issue implementing mortgagee letter or guidance within 240 days of enactment specifying requirements and a prior compliance demonstration method, with the guidance taking effect no later than 180 days after issuance.

This section authorizes the Appraisal Subcommittee, subject to approval by the Federal Financial Institutions Examination Council, to adjust annual registry fees for appraisal management companies (AMCs)—previously set at a $25 base per appraiser (adjustable up to $50 at the Subcommittee's discretion)—as necessary to carry out its functions. (The Appraisal Subcommittee maintains the national registry of appraisers and appraisal management companies and oversees state licensing compliance for appraisals in federally related transactions.)

This section requires the Appraisal Subcommittee to include State credentialed trainee appraisers on its national registry of appraisers eligible to perform appraisals in federally related transactions (previously limited to State certified and licensed appraisers); updates annual registry fee requirements to cover State trainee credential rosters and related reporting to the national registry; authorizes a State certified appraiser to use the assistance of a State credentialed trainee appraiser or unlicensed trainee appraiser when performing an appraisal for federally related transactions, with the certified appraiser liable for the final work; and defines State credentialed trainee appraiser. (As background, the Appraisal Subcommittee oversees State appraiser certification and licensing programs under Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to ensure standards for appraisals in federally related transactions, such as mortgages backed by federally regulated financial institutions.) A rule of construction clarifies that these amendments do not require any State to establish or operate a trainee appraiser program.

This section authorizes the Appraisal Subcommittee to make grants to State appraiser certifying and licensing agencies, nonprofit organizations, and institutions of higher education to support education and training activities or other activities addressing appraiser industry workforce needs, including recruiting and retaining talent (e.g., through scholarship assistance and career pipeline development). (As background, such grants would be funded from the registry fees collected from appraisers and appraisal management companies under 12 U.S.C. 3338(a)(4) for oversight of state appraiser certification and licensing programs.)

This section expands the membership of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council by adding designees from the Department of Veterans Affairs, the Rural Housing Service of the Department of Agriculture, and the Department of Housing and Urban Development. (The subcommittee oversees the real estate appraisal regulatory activities of state appraiser certifying and licensing boards.)