Recent Newsletters

The Appraisal Institute noted in both a comment to the IRS and in testimony before the agency that it supports the IRS’s proposed rule to curb syndicated conservation easement transactions.

The General Services Administration on March 7 issued a final rule that amends the Federal Management Regulation, Real Estate Acquisition, by clarifying policies regarding lease agreements for high-security space in accordance with the Secure Federal Leases from Espionage And Suspicious Entanglements Act, also referred to as the Secure Federal Leases Act.

The incorporation of the Appraisal Institute's Practical Applications of Real Estate Appraisal, known as AI PAREA, into state laws and regulations is gaining momentum. Forty-three states indicate they are willing to accept it fully, partially or by reference as an alternative for residential appraiser licensing experience requirements; 37 states indicate they will accept it to satisfy 100% of experience requirements.

The legislatures in 43 states, the District of Columbia and all five U.S. territories are in session. The Appraisal Institute’s Washington office is currently tracking 75 pending measures, and continues to work with its chapters, regions and state coalitions to help shape public policy affecting AI Professionals and the valuation profession.

The AI Government Relations Committee on March 28 hosted a discussion with Lyle Radke, senior director of collateral risk at Fannie Mae, to discuss the new “Value Acceptance” (appraisal waiver) program. The conversation, which also included a panel of designated appraisers, can be viewed on the AI YouTube channel.

The Appraisal Institute on Feb. 28 hosted a webinar with James Heaslet, chief appraiser for the Department of Veterans Affairs, in which a wide range of valuation topics was discussed. View the webinar on the AI You Tube channel.

The Appraisal Institute along with ASA, ASFRMA and MBREA submitted on Feb. 2 a comment letter to the Federal Housing Administration in response to a draft Mortgagee Letter from the Department of Housing and Urban Development that establishes a process for underwriters when a borrower requests a review of an appraisal associated with an FHA-insured mortgage application.

The Appraisal Institute along with its government relations consulting firm Rich Feuer Anderson produced a comprehensive pre-election 2022 outlook that addresses how the upcoming elections relate to the financial services sector.

The Federal Registry on Oct. 7 published the Appraisal Subcommittee’s long-awaited final rule, which amends its existing policies on temporary waiver requests. This rule addresses waivers of appraisal licensing requirements, not appraisals, which still must comply with the Uniform Standards of Professional Appraisal Practice. The rule will take effect Dec. 6.

The Property Appraisal and Valuation Equity task force continues its work to implement its action plan, and in the process several themes are emerging.

The U.S. Department of Labor is seeking comments on its proposal to modify regulations that its Wage and Hour Division uses to analyze employee or independent contractor classification under the Fair Labor Standards Act, or FLSA. The changes are intended to make regulations more consistent with judicial precedent and the FLSA's text and purpose. Valuation firms are among the organizations affected by the proposal, as are appraisal management companies, appraisers operating under independent contractor arrangements and financial institutions. Comments are due Nov. 28.

The incorporation of the Practical Applications of Real Estate Appraisal, known as PAREA, into state laws and regulations is gaining momentum. PAREA is an alternative method to satisfy experience requirements for residential appraiser licensing.

Only eight state legislatures are still in session, but the year has seen a bevy of activity related to valuation — the Appraisal Institute has tracked nearly 80 bills. State regulatory agencies have also been busy proposing new rules, mostly related to synchronous and live-stream distance education. AI’s Washington office continues to work with its chapters, regions and state coalitions to help shape public policy affecting AI professionals and the valuation profession.

The Consumer Financial Protection Bureau in late February took the first step in its long-awaited process to implement quality control standards for its automated valuation model, which was mandated by the Dodd-Frank Act of 2010.

March has been an active month relative to housing equity and diversity issues, with the March 23 release of the Property Appraisal and Valuation Equity (PAVE) Task Force action plan and the Senate and House holding immediate oversight hearings on the matter. The Appraisal Institute sent a letter to President Joe Biden in response to the action plan, and AI President Jody Bishop, MAI, SRA, AI-GRS, testified before the House Committee on Financial Services on March 29.

Illinois Gov. J.B. Pritzker on May 27 signed HB 4410, legislation creates a real estate valuation task force charged with identifying causes of racial disparities in appraisals and evaluating whether barriers to entry to the valuation profession disproportionately affect minorities. Additionally, it would establish specific definitions for limited or inactive housing markets in which comparable sales are limited or unavailable and would provide greater flexibilities and guidance for appraisals conducted in such markets — such as allowing appraisers to consider market evidence for similar properties in other geographic areas.

Virginia Gov. Glenn Youngkin on April 6 signed SB 284, making the state the latest to require appraisers to take continuing education related to fair housing and valuation bias. California, Minnesota and New York have similar requirements.

West Virginia Gov. Jim Justice on March 30 signed HB 4285, legislation that makes technical changes to the state’s Real Estate Appraiser Licensing and Certification Act. Now, the state appraiser board must provide to individuals whose initial license application or renewal was rejected a written statement within 15 days explaining what qualifications or requirements they failed to satisfy. If an initial license was rejected due to an applicant’s failure to comply with the Uniform Standards of Professional Appraisal Practice in their reports submitted for experience review, the board must provide written guidance regarding the deficiencies and give applicants 60 days to remedy them.

Wisconsin Gov. Tony Evers on March 18 signed SB 341, which imposes a time limit on civil suits against real estate appraisers. The new law took effect March 20, and applies only to appraisals delivered after that date.

Thirty-two states have indicated that they will accept completion of an Appraiser Qualifications Board-approved Practical Applications of Real Estate Appraisal Program, known as PAREA, to satisfy all or part of the experience requirements for individuals to become licensed residential or certified residential appraisers.

The Charitable Conservation Easement Program Integrity Act (HR 4164/S 2256) is bipartisan legislation  that targets abusive conservation syndications. It is under consideration in Congress but is no longer being considered as part of the Biden administration’s “Build Back Better” plan.

The IRS in October made changes to its Penalty Handbook and Penalties Applicable to Incorrect Appraisals. Appraisers who conduct work for the IRS are strongly encouraged to familiarize themselves with the procedures outlined in the manual, which, among other things, defines how a 6695A penalty would be applied against appraisers. Also addressed are issues surrounding the issuance of a Letter 4477, audit appointment meetings and the “more likely than not” exception.

The National Fair Housing Alliance, under contract by the Appraisal Subcommittee and the Council on Licensure, Enforcement and Regulation, on Jan. 19 released its report on whether the Uniform Standards of Professional Appraisal Practice and Appraiser Qualifications Criteria support or promote fairness, equity, objectivity and diversity in both appraisals and the training and credentialing of appraisers.

Beginning April 1, Fannie Mae will require appraisers to report a property’s gross living area and non-gross living area for appraisals involving interior and exterior inspections by using the American National Standard for Single-Family Residential Buildings, Square Footage Method of Calculating, ANSI Z765-2021. This standard was last updated in May.