Appraisers (FHA Participants)

HUD Handbook 4000.1 >> Appraisers (FHA Participants)

Editor’s note: You are currently referencing section I.B.1 of the FHA Single Family Housing Handbook (HUD Handbook 4000.1). This section of the handbooks relates to appraisers who participate in the FHA program. It covers the appraiser roster, application procedures, renewals and more. The information below was adapted from HUD Handbook 4000.1 in September 2015.


Effective September 14, 2015

a. FHA Appraiser Roster

i. Definition

Appraiser refers to an FHA Roster Appraiser who observes, analyzes, and reports the physical and economic characteristics of a Property and provides an opinion of value to FHA. An Appraiser’s observation is limited to readily observable conditions and is not as comprehensive an inspection as one performed by a licensed home inspector.

ii. Standard

FHA requires Mortgagees to select qualified, competent and knowledgeable Appraisers.

FHA maintains a list of qualified Appraisers on the FHA Appraiser Roster. Only an Appraiser on the FHA Appraiser Roster and the Appraisal Subcommittee’s (ASC) National Registry may be selected by the Mortgagee to conduct an appraisal for FHA-insured financing.

b. Application and Approval Process

i. Eligibility Requirements

(A) General For placement on the FHA Appraiser Roster, the appraiser must:

  • be a state-certified residential or state-certified general appraiser with credentials based on the minimum licensing/certification criteria issued by the Appraiser Qualifications Board (AQB) of the Appraisal Foundation;
  • not be suspended, debarred, or otherwise excluded; and
  • not be listed on HUD’s Limited Denial of Participation (LDP) List, HUD’s Credit Alert Verification Reporting System (CAIVRS), or subject to any current loss of standing or suspension as a certified appraiser in any state.

(B) Competency Requirement The Appraiser must be knowledgeable of the Uniform Standards of Professional Appraisal Practice (USPAP) and FHA appraisal requirements. The Appraiser must meet the competency requirements defined in the USPAP prior to accepting an assignment. The Appraiser must be knowledgeable in the market where the assignment is located.

(C) Licensing Requirement The Appraiser must be a state-certified residential or state-certified general Appraiser. The Appraiser must maintain and be able to prove certification in all states in which the Appraiser performs appraisals.

ii. Submitting the Application and Required Documentation

The appraiser must submit applications electronically through FHA Connection (FHAC) and follow the FHA Appraiser Roster Application Instructions.

(A) Form HUD-92563a The appraiser must complete form HUD-92563a in FHAC. The appraiser must sign this form, scan it and save it in a PDF format for delivery to FHA. The appraiser must certify that the appraiser has “read and fully understands and will comply with FHA Single Family Housing Policy Handbook (SF Handbook), and FHA Single Family Housing Appraisal Report and Data Delivery Guide.”

(B) State Certification The appraiser must provide a PDF image of their current state-issued certification for each state in which the appraiser is certified.

(C) Pending or Settled Actions The applicant must disclose all lawsuits, administrative complaints, Findings, or reports produced in connection with an investigation, audit, or review conducted by HUD, another federal, state, or local governmental agency, or by any other regulatory or oversight entity with jurisdiction over the appraiser, its officers, partners, directors, principals, managers, supervisors, and other agents, that are currently pending or were resolved within two years of the application, including any violations of the Fair Housing Act.

iii. Processing of Application

FHA will review all completed applications for approval to determine if the appraiser complies with all eligibility requirements. If FHA requires additional documentation or clarifying information, FHA may request such additional information and provide the appraiser with a deadline for response. If the appraiser does not submit a completed application or provide the additional information requested by the specified deadline, FHA may deny approval on this basis.

iv. Application Approval

If FHA approves the appraiser’s application, the Appraiser’s name will appear on the FHA Appraiser Roster.

v. Application Rejection

Applicants deemed ineligible for placement on the FHA Appraiser Roster will be notified electronically and provided the reason(s) for denial.

c. Renewal

The Appraiser should renew expiring licenses at least 45 Days prior to expiration in order for state records to process the renewal to the ASC National Registry. FHA Appraiser Roster records are based on National Registry records. Failure of the Appraiser to renew in a timely manner may result in removal from the FHA Appraiser Roster.

d. Post-Approval Requirements

The Appraiser must comply with the following requirements and restrictions for its FHA business operations in addition to continuing to operate in full compliance with the eligibility requirements outlined in this SF Handbook.

i. Compliance with Law

The Appraiser’s performance must comply with all applicable federal, state, and local laws. The Appraiser must adhere to all state and local laws relating to appraisal, licensing and certification requirements.

ii. Appraiser Competency Requirement

The Appraiser assigned to provide the appraisal must be able to complete an assignment for the property type, assignment type, and geographic location of the subject Property.

The Appraiser must comply with the USPAP, including the Competency Rule, when conducting appraisals of Properties intended as security for FHA-insured financing.

iii. Communications with Appraisers

An FHA Roster Appraiser must avoid conflicts of interest and the appearance of conflicts of interest. To avoid conflicts or the appearance of conflicts:

  • no member of a Mortgagee’s loan production staff or any person who is compensated on a commission based upon the successful completion of a loan; or
  • anyone who reports ultimately to any officer of the Mortgagee not independent of the loan production staff and process;

shall have substantive communications with an Appraiser relating to or having an impact on valuation, including ordering or managing an appraisal assignment.

The Appraiser is bound by the confidentiality provisions of the USPAP and may not discuss the value or conclusions of the appraisal with anyone other than the Direct Endorsement (DE) underwriter or FHA staff or their representatives. The Appraiser may discuss components of the appraisal that influence its quality and value with the DE underwriter who has responsibility for underwriting the case.

The Appraiser may interact with real estate agents and others, during the normal course of business, to provide property access, information and other market data.

iv. Appraisal Fees

The Appraiser and the Mortgagee or Mortgagee-designated third party will negotiate the appraisal fees and due date. FHA does not establish appraisal fees or due dates.

v. Obligation to Report to FHA

(A) Professional Appraisal Organizations The Appraiser may be a member or hold designations in professional appraisal organizations. If the Appraiser is a member, candidate or associate of an appraisal organization, the Appraiser must report, by calling 1-800-CallFHA or sending an email to, any adjudicated actions resulting in a disciplinary action, or the suspension of the Appraiser, to FHA within 14 Days of such action. On disposition or adjudication of the action, the Appraiser must provide FHA with documentation and official Findings. FHA may consider sanctions, including removal of an Appraiser found guilty of professional misconduct as adjudicated by a professional appraisal organization.

(B) Safeguards for Appraiser Independence The Appraiser must report attempts to influence independence to or by calling1-800-CallFHA. In addition, the appraiser must report the attempts to HUD OIG Hotline. Mortgagees, Appraisal Management Companies (AMC) and third parties are prohibited from influencing the independence of the Appraiser and the valuation process. Prohibited acts and attempts to influence the results of an appraisal include the following:

  • withholding or threatening to withhold timely payment or partial payment for an appraisal report;
  • withholding or threatening to withhold future business from an Appraiser, or demoting, terminating or threatening to demote or terminate an Appraiser;
    making expressed or implied promises of future business, promotions or increased compensation for an Appraiser;
  • conditioning the ordering of an appraisal report or the payment of an appraisal fee, salary, or bonus on the opinion, conclusion or valuation to be reached, or on a preliminary value estimate requested from an Appraiser;
  • requesting that an Appraiser provide an estimated, predetermined or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an Appraiser provide estimated values or comparable sales at any time prior to the Appraiser’s completion of an appraisal report;
  • providing the Appraiser with an anticipated, estimated, encouraged or desired value for a subject Property, or a proposed or target amount to be loaned to the Borrower, except for a copy of the sales contract for purchase and any addendum, which must be provided;
    providing the Appraiser, appraisal company, AMC or any Entity or person related to the Appraiser, with stock or other financial or non-financial benefits;
  • allowing the removal of an Appraiser from a list of qualified Appraisers or the addition of an Appraiser to an exclusionary list of qualified appraisers, used by any Entity, without prompt written notice to the Appraiser that includes written evidence of the Appraiser’s illegal conduct, violation of the USPAP or state licensing standards, improper or unprofessional behavior or other substantive reason for removal;
  • ordering, obtaining, using, or paying for a second or subsequent appraisal or Automated Valuation Model (AVM) in connection with a mortgage financing transaction, unless:
    • there is a reasonable basis to believe that the initial appraisal was flawed or tainted and such appraisal is clearly and appropriately noted in the loan file; or
    • such appraisal or AVM was completed pursuant to a written, pre-established bona fide pre- or post-funding appraisal review, quality control process or underwriting guidelines and the Mortgagee adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value; and
  • any other act or practice that impairs or attempts to impair an Appraiser’s independence, objectivity, impartiality or violates law or regulation, including, the Truth in Lending Act (TILA), Regulation Z and the USPAP.