119 S1635 IS: Appraisal Industry Improvement Act
U.S. Senate
2025-05-07
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II
119th CONGRESS
1st Session
S. 1635
IN THE SENATE OF THE UNITED STATES
May 7, 2025
Mr. Cramer (for himself and Mr. Gallego) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To amend the National Housing Act to authorize State-licensed appraisers to conduct appraisals in connection with mortgages insured by the FHA and to ensure compliance with the existing appraiser education and competency requirements, and for other purposes.
1.

Short title
This Act may be cited as the “Appraisal Industry Improvement Act”.
2.

Appraiser standards
(a)

Certification or licensing
(1)

In general
Section 202(g)(5) of the National Housing Act (12 U.S.C. 1708(g)(5)) is amended—
(A)
by moving the paragraph two ems to the left; and
(B)
by striking subparagraphs (A) and (B) and inserting the following:
“(A)
be certified or licensed by the State in which the property to be appraised is located, except that a Federal employee who chooses to become State-licensed or certified real estate appraisers need to only be licensed or certified in 1 State or territory to perform real estate appraisal duties as a Federal employee in all States and territories;
(B)
meet the competency requirements described in the Uniform Standards of Professional Appraisal Practice before accepting an assignment; and
(C)
have demonstrated verifiable education in the appraisal requirements established by the Federal Housing Administration under this subsection, which shall include the completion of a course or seminar that educates appraisers on those appraisal requirements, which shall be—
(i)
provided by the Federal Housing Administration or a private or public organization with special competence in and knowledge of appraisal education through contracts, grants, or other assistance provided by the Secretary; or
(ii)
approved by the Course Approval Program of the Appraiser Qualification Board of the Appraisal Foundation or a State appraiser certifying and licensing agency.”.
(2)

Application
Subparagraph (C) of section 202(g)(5) of the National Housing Act (12 U.S.C. 1708(g)(5)), as added by paragraph (1), shall not apply with respect to any appraiser approved by the Federal Housing Administration to conduct appraisals on mortgages insured under title II of the National Housing Act (12 U.S.C. 1707 et seq.) on or before the date on which the mortgagee letter or other guidance or regulations take effect under subsection (c)(3).
(b)

Compliance with verifiable education and competency requirements
Effective beginning on the date on which the mortgagee letter or other notice or regulations take effect under subsection (c)(3), no appraiser may conduct an appraisal for any mortgage insured under title II of the National Housing Act (12 U.S.C. 1707 et seq.) unless—
(1)
the appraiser is in compliance with the requirements under subparagraphs (A) and (B) of section 202(g)(5) of such Act (12 U.S.C. 1708(g)(5)), as amended by subsection (a); and
(2)
if the appraiser was not approved by the Federal Housing Administration to conduct appraisals on mortgages insured under title II of the National Housing Act (12 U.S.C. 1707 et seq.) before the date on which the mortgagee letter or other notices or regulations take effect under subsection (c)(3), the appraiser is in compliance with subparagraph (C) of such section 202(g)(5).
(c)

Implementation
Not later than the 240 days after the date of enactment of this Act, the Secretary of Housing and Urban Development shall issue a mortgagee letter or other notice or regulations that shall—
(1)
implement the amendments made by subsection (a);
(2)
clearly set forth all of the specific requirements under section 202(g)(5) of the National Housing Act (12 U.S.C. 1708(g)(5)), as amended by subsection (a), for approval to conduct appraisals under title II of such Act (12 U.S.C. 1707 et seq.), which shall include—
(A)
providing that, before the effective date of the mortgagee letter or other guidance or regulations, a demonstration of competency and completion of training that meet the requirements under subparagraphs (A), (B), and (C) of such section 202(g)(5), as amended by subsection (a), shall be considered to fulfill the requirements under such subparagraphs; and
(B)
providing a method for appraisers to demonstrate such prior competency and completion; and
(3)
take effect not later than the date that is 180 days after the date on which the Secretary issues the mortgagee letter or other notice or regulations.
3.

Annual registry fees for appraisal management companies
Section 1109(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)) is amended, in the matter following clause (ii) of paragraph (4)(B), by adding at the end the following: “If the Appraisal Subcommittee determines that the fees established under clause (i) or (ii) result in adverse consequences or are otherwise not appropriately tailored to meet the functions of the Appraisal Subcommittee under this Act, the Appraisal Subcommittee may establish a new formula to decrease the amount of the fees.”.
4.

State credentialed trainee appraisers
(a)

Maintenance on national registry
Section 1103(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a)) is amended—
(1)
in paragraph (3)—
(A)
by inserting “and State credentialed trainee appraisers” after “licensed appraisers”; and
(B)
by striking “and” at the end;
(2)
by striking paragraph (4);
(3)
by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively; and
(4)
in paragraph (4), as so redesignated—
(A)
by striking “year. The report shall also detail” and inserting “year, details”;
(B)
by striking “provide” and inserting “provides”; and
(C)
by striking the period at the end and inserting “; and”.
(b)

Annual registry fees
(1)

In general
Section 1109 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338) is amended—
(A)
in the section heading, by striking “or licensed” and inserting “, licensed, and credentialed trainee”; and
(B)
in subsection (a)—
(i)
in paragraph (1), by inserting “, and in the case of a State with a supervisory or trainee program, a roster listing individuals who have received a State trainee credential” after “this title”;
(ii)
by striking paragraph (2) and inserting the following:
“(2)
transmit reports on the issuance and renewal of licenses, certifications, credentials, sanctions, and disciplinary actions on a timely basis to the national registry of the Appraisal Subcommittee;”; and
(iii)
in paragraph (4)(A)—
(I)
by inserting “including State credentialed trainee appraisers,” after “transactions,”; and
(II)
by inserting “and from State credentialed trainee appraisers, an annual registry fee of not more than $20,” after “$40,”.
(2)

Rule of construction
Nothing in the amendments made by paragraph (1) shall require a State to establish or operate a program for State credentialed trainee appraisers, as defined in paragraph (12) of section 1121 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as added by subsection (d) of this section.
(c)

Transactions requiring the services of a State certified appraiser
Section 1113 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3342) is amended—
(1)
by striking “In determining” and inserting “(a) In general.—In determining”; and
(2)
by adding at the end the following:
“(b)

Use of State credentialed trainee appraisers
In performing an appraisal under this section, a State certified appraiser may use the assistance of a State credentialed trainee appraiser or an unlicensed trainee appraiser.”.
(d)

Definition
Section 1121 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350) is amended by adding at the end the following:
“(12)

State credentialed trainee appraiser
The term State credentialed trainee appraiser means an individual who—
(A)
meets the minimum criteria established by the Appraiser Qualification Board for a trainee appraiser credential; and
(B)
is credentialed by a State appraiser certifying and licensing agency.”.
5.

Grants for workforce and training
Section 1109(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(b)) is amended—
(1)
in paragraph (5), by striking “and” at the end;
(2)
in paragraph (6), by striking the period at the end and inserting “; and”; and
(3)
by adding at the end the following:
“(7)
to make grants to State appraiser certifying and licensing agencies to support the carrying out of education and training activities or other activities deemed appropriate by the Appraisal Subcommittee for purposes of addressing appraiser industry workforce needs.”.
6.

Appraisal Subcommittee
Section 1011 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3310) is amended, in the first sentence, by inserting “the Department of Veterans Affairs, the Rural Housing Service of the Department of Agriculture, the Department of Housing and Urban Development,” after “Financial Protection,”.