[Federal Register Volume 68, Number 95 (Friday, May 16, 2003)]
[Rules and Regulations]
[Pages 26946-26950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12205]



[[Page 26945]]

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Part VII





Department of Housing and Urban Development





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24 CFR Part 200



Appraiser Qualifications for Placement on FHA Single Family Appraiser 
Roster; Final Rule

  Federal Register / Vol. 68, No. 95 / Friday, May 16, 2003 / Rules and 
Regulations  

[[Page 26946]]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 200

[Docket No. FR-4620-F-02]
RIN 2502-AH59


Appraiser Qualifications for Placement on FHA Single Family 
Appraiser Roster

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Final rule.

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SUMMARY: This final rule makes several changes designed to strengthen 
the licensing and certification requirements for placement on the 
Federal Housing Administration (FHA) Appraiser Roster (Appraiser Roster 
or FHA Appraiser Roster). First, the final rule requires that 
appraisers on the Appraiser Roster must have credentials that are based 
on the minimum licensing/certification standards issued by the 
Appraiser Qualifications Board of the Appraisal Foundation. The final 
rule also clarifies that an appraiser may be removed from the Appraiser 
Roster if the appraiser loses his or her license or certification in 
any state due to disciplinary action, even if the appraiser continues 
to be licensed or certified in another state. Further, the final rule 
provides that an appraiser whose license or certification in any state 
has been revoked, suspended, or surrendered as a result of a state 
disciplinary action will be automatically suspended from the Appraiser 
Roster until HUD receives evidence demonstrating that the state imposed 
sanction has been lifted. An appraiser whose licensing or certification 
in a state has expired is automatically suspended from the Appraiser 
Roster in that state and may not conduct FHA appraisals in that state 
until HUD receives evidence that demonstrates renewal, but may continue 
to perform FHA appraisals in other states in which the appraiser is 
licensed or certified. This final rule follows publication of a 
November 30, 2001, proposed rule and takes into consideration the 
public comments received on the proposed rule.

DATES: Effective Date: With the exception of Sec.  200.202(b)(1) and 
(c), this final rule is effective on June 16, 2003. HUD will publish a 
notice in the Federal Register announcing the effective date of Sec.  
200.202(b)(1) and (c).

FOR FURTHER INFORMATION CONTACT: Vance T. Morris, Director, Office of 
Single Family Program Development, Room 9266, Department of Housing and 
Urban Development, 451 Seventh Street, SW., Washington, DC 20410-8000; 
telephone (202) 708-2121 (this is not a toll-free number). Hearing- or 
speech-impaired individuals may access this number via TTY by calling 
the toll-free Federal Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 30, 2001 (66 FR 60128), HUD published a proposed rule 
designed to strengthen the licensing and certification requirements for 
placement on the Appraiser Roster. The Appraiser Roster lists those 
appraisers who are eligible to perform FHA single family appraisals. 
HUD maintains the Appraiser Roster to provide a means by which HUD can 
ensure the competency of appraisers performing FHA appraisals. The 
Appraiser Roster regulations are located in 24 CFR part 200, subpart G 
(consisting of Sec. Sec.  200.200-200.206).
    Under the November 30, 2001, proposed rule, appraisers on the 
Appraiser Roster would be required to have credentials based on the 
minimum licensing/certification standards issued by the Appraiser 
Qualifications Board (AQB) of the Appraisal Foundation. Further, an 
appraiser would be subject to removal from the Appraiser Roster if the 
appraiser loses his or her license or certification in any state due to 
disciplinary action, even if the appraiser continues to be licensed or 
certified in another state. The proposed rule also provides that an 
appraiser who is licensed or certified in a single state and whose 
state license or certification has expired, or has been revoked, 
suspended, or surrendered as a result of a state disciplinary action 
would be automatically suspended from the Appraiser Roster and 
prohibited from conducting FHA appraisals until HUD receives evidence 
demonstrating license or certification renewal or that the state-
imposed sanction has been lifted.
    The preamble to the November 30, 2001, proposed rule provides 
additional details regarding the proposed amendments to the FHA 
Appraiser Roster licensing and certification requirements.

II. This Final Rule

    This final rule follows publication of the November 30, 2001, 
proposed rule and takes into consideration the public comments received 
on the proposed rule. The most significant differences between this 
final rule and the November 30, 2001, proposed rule are as follows:
    1. Twelve-month phase-in of AQB requirements for appraisers listed 
on the Appraiser Roster. The final rule provides that an appraiser who 
is included on the Appraiser Roster on the effective date of this rule, 
but who does not meet the minimum AQB licensing/certification criteria 
in effect on that date, has until 12 months following the effective 
date of the final rule to fully comply with the AQB criteria and submit 
evidence of such compliance to HUD. Failure to submit such evidence to 
HUD by the deadline date constitutes cause for removal from the 
Appraiser Roster. The phase-in period does not restrict HUD's ability 
to remove an unsatisfactory appraiser from the Appraiser Roster for any 
other cause identified in Sec.  200.204.
    2. Automatic suspension of appraisers licensed or certified in 
multiple states. The final rule provides that an appraiser whose 
license or certification in any state has been revoked, suspended, or 
surrendered as a result of a state disciplinary action will be 
automatically suspended from the Appraiser Roster until HUD receives 
evidence demonstrating that the state-imposed sanction has been lifted. 
The proposed rule would have limited automatic suspension to appraisers 
licensed or certified in a single state.
    3. Clarification of scope of automatic suspensions not due to state 
disciplinary action. The final rule clarifies that an appraiser whose 
licensing or certification in a state has expired is automatically 
suspended from the Appraiser Roster in that state and may not conduct 
FHA appraisals in that state until HUD receives evidence that 
demonstrates renewal. The appraiser may continue to perform FHA 
appraisals in other states in which the appraiser is licensed or 
certified.

III. Discussion of the Public Comments Received on the November 30, 
2001, Proposed Rule

    The public comment period on the proposed rule closed on January 
29, 2002. HUD received fourteen public comments on the proposed rule. 
Comments were received from the Appraisal Foundation; realtors; 
appraisers; state real estate appraiser boards; and national 
organizations representing banking institutions, appraisers, realtors, 
and state appraiser regulatory agencies. This section of the preamble 
presents a summary of the significant issues raised by the public 
commenters, and HUD's responses to the comments.

A. Comments Regarding AQB Criteria

    Comment: How will HUD determine whether state requirements conform 
to AQB criteria? Several commenters asked

[[Page 26947]]

how HUD would determine whether state licensing/certification 
requirements comply with AQB criteria, since both the state 
requirements and the AQB standards are subject to periodic change. 
Accordingly, states that comply with the current AQB criteria may later 
fall out of compliance due to changes adopted by the AQB or the state 
legislature. To address these concerns, one of the commenters suggested 
that an appraiser be eligible for inclusion on the Appraiser Roster if 
the state requirements conformed to the AQB criteria in effect at the 
time the appraiser obtained the license or certification. Two other 
commenters recommended that the final rule focus on whether individual 
appraisers comply with the AQB criteria, rather than on whether state 
requirements are in compliance with these standards.
    HUD response. HUD will periodically monitor the compliance of the 
states with the minimum AQB requirements to ensure that all appraisers 
included on the Appraiser Roster meet these standards.
    Comment: How will HUD treat appraisers who received their AQB 
license or certification through ``grandfathering?'' Several commenters 
questioned the impact of the proposed rule on ``grandfathered'' 
appraisers who received their licensing or certification prior to the 
state's adoption of AQB criteria. Two of the commenters recommended 
that HUD immediately remove such appraisers from the Appraiser Roster 
and require them to re-apply and demonstrate compliance with the AQB 
requirements. However, other commenters cautioned against such 
removals. One of these commenters suggested that ``grandfathered'' 
appraisers should instead be allowed to remain on the Appraiser Roster 
if they can provide a letter from the state appraiser licensing agency 
attesting that the appraiser satisfies the AQB criteria.
    HUD Response. The final rule provides that appraisers, including 
the ``grandfathered'' appraisers mentioned by the commenters, who are 
included on the Appraiser Roster on the effective date of this rule, 
but who do not meet the minimum AQB licensing/certification criteria in 
effect on that date, have 12 months following the effective date of the 
final rule to fully comply with the AQB criteria and submit evidence of 
such compliance to HUD. Failure to submit such evidence to HUD by the 
deadline date constitutes cause for removal from the Appraiser Roster. 
The phase-in period does not restrict HUD's ability to remove 
unsatisfactory appraisers from the Appraiser Roster for any other cause 
identified in Sec.  200.204.
    Comment: Will HUD remove appraisers licensed or certified in states 
that do not currently meet the AQB criteria? One commenter posed this 
question.
    HUD Response. As noted in the response to the preceding comment, 
HUD will allow such an appraiser to remain on the Appraiser Roster for 
12 months following the effective date of the final rule, at which time 
the appraiser must be in full compliance with the AQB criteria.
    Comments: AQB requirements should be ``phased-in.'' One commenter 
wrote that the proposed AQB requirements should be ``phased-in'' to 
provide appraisers with sufficient time to satisfy these criteria.
    HUD Response. HUD agrees with the commenter. As noted, an appraiser 
currently included on the Appraiser Roster, but who does not meet the 
minimum AQB licensing/certification criteria in effect on that date, 
has 12 months following the effective date of the final rule to fully 
comply with the AQB criteria and submit evidence of such compliance to 
HUD. Failure of the appraiser to submit such evidence to HUD by the 
deadline date constitutes cause for removal from the Appraiser Roster. 
The phase-in period does not restrict HUD's ability to remove an 
unsatisfactory appraiser from the Appraiser Roster for any other cause 
identified in Sec.  200.204.
    Comment: HUD should identify those states whose licensing and 
certification requirements do not meet AQB criteria. One commenter made 
this suggestion.
    HUD Response. The Appraisal Subcommittee is the official authority 
for determining and identifying each state's compliance with the AQB 
criteria.
    Comment: HUD's use of the phrase ``professional credentials'' may 
be inappropriate. One commenter wrote that the proposed rule's use of 
the phrase ``professional credentials'' when referring to the AQB 
criteria is inappropriate. According to the commenter, the term 
``professional credentials'' is commonly understood by appraisers to 
refer to designations earned within professional membership 
organizations. The commenter wrote that reference in the proposed rule 
to this phrase is misapplied if used to apply to the gap between a 
state's licensing and certification criteria and the minimum AQB 
criteria. The commenter recommended that HUD create a more appropriate 
phrase to identify this concept.
    HUD Response. HUD has revised the proposed rule to be more 
sensitive to the issues raised by the commenter. The final rule refers 
to ``credentials,'' rather than ``professional credentials.''

B. Other Comments Regarding Qualifications for Placement on the 
Appraiser Roster

    Comment: Appraisers should be required to have at least two years 
experience as licensed or certified appraisers for placement on the 
Appraiser Roster. One commenter made this suggestion. According to the 
commenter, FHA appraisals are often more complicated than those for 
conventional mortgage loans, and thus require additional experience. 
The commenter wrote that in comparison to conventional appraisals, FHA 
appraisals require a higher degree of skill and more knowledge of 
construction, depreciation, cost estimating for repairs, and estimating 
the useful and remaining life of residential improvements and 
equipment.
    HUD Response. At this time, HUD does not plan additional changes to 
the experience requirements for placement on the Appraiser Roster. 
Rather, HUD will rely on the AQB experience criteria. HUD believes that 
the AQB standard is sufficient to ensure that appraisers included on 
the Appraiser Roster have the necessary experience to perform FHA 
appraisals.
    Comment: HUD should determine whether an appraiser has been subject 
to state disciplinary action before approving the appraiser for 
placement on the Appraiser Roster. Two commenters made this 
recommendation. The commenters wrote that HUD might consider using the 
National Registry of Appraisers maintained by the Appraisal 
Subcommittee for this purpose. However, one of the commenters cautioned 
that the National Registry may be inadequate and suggested that HUD 
should consider establishing its own independent verification methods.
    HUD Response. The change requested by the commenters is outside the 
scope of the November 30, 2001, proposed rule and would require 
additional notice and comment prior to implementation. At this time, 
HUD does not plan additional changes to the requirements for placement 
on the Appraiser Roster. HUD believes the current placement procedures 
are adequate to ensure that appraisers included on the Appraiser Roster 
are competent to perform FHA appraisals.

[[Page 26948]]

C. Comment Regarding Automatic Suspension From the Appraiser Roster

    Comment: Appraisers who are licensed or certified in multiple 
states should also be subject to automatic suspension. Under the 
November 30, 2001, proposed rule, only those appraisers licensed or 
certified in a single state would be subject to automatic suspension 
from the Appraiser Roster due to state disciplinary action. Three 
commenters recommended that the scope of automatic suspensions be 
expanded to include appraisers licensed or certified in multiple 
states. The commenters suggested that such appraisers should be 
automatically suspended from the Appraiser Roster if they lose their 
license or certification due to disciplinary action in any state.
    HUD Response. HUD agrees with the commenters and has revised the 
proposed rule accordingly.
    Comment: HUD should clarify that voluntarily electing not to renew 
a state license or certification does not constitute ``disciplinary 
action'' for purposes of automatic suspension from the Appraiser 
Roster. One commenter made this suggestion. The commenter wrote that 
depending on state law, if an appraiser willingly allows his or her 
license to expire, it might appear that the license expired due to 
disciplinary action. The commenter suggested that the final rule 
clarify that the voluntary expiration of a state appraisal license or 
certification does not constitute a disciplinary action.
    HUD Response. HUD has revised the regulatory text to be more 
sensitive to the issue raised by the commenter. Specifically, the final 
rule clarifies that an appraiser whose licensing or certification in a 
state has expired is automatically suspended from the Appraiser Roster 
in that state and may not conduct FHA appraisals in that state until 
HUD receives evidence that demonstrates renewal. The appraiser may 
continue to perform FHA appraisals in other states in which the 
appraiser is licensed or certified.
    Comment: HUD should report appraisers who have been removed from 
the Appraiser Roster to the appropriate state appraisal licensing 
authorities. Three commenters made this suggestion.
    HUD Response. HUD will provide this information to states as 
appropriate.
    Comment: Appraisers should not be removed from Appraiser Roster 
prior to state review of case. One commenter wrote that anytime HUD's 
review process determines that an appraiser is performing unethical or 
substandard work, the appraiser should be suspended from the Appraiser 
Roster and referred by HUD to the appropriate state agency for 
disciplinary action. The commenter wrote that an appraiser should not 
be removed from the Appraiser Roster until the state agency has had the 
opportunity to review the case and determine whether disciplinary 
action is appropriate. According to the commenter, this method will 
protect appraisers from the administrative burden of reapplying for 
placement on the Appraiser Roster.
    HUD Response. The suggestion made by the commenter is outside the 
scope of the November 30, 2001, proposed rule. At this time, HUD does 
not anticipate making any changes to the Appraiser Roster removal 
procedures. HUD believes that the existing removal procedures are 
sufficient to safeguard the interests of FHA homebuyers, HUD, and 
appraisers included on the Appraiser Roster.

IV. Findings and Certifications

Regulatory Planning and Review

    The Office of Management and Budget (OMB) reviewed this rule under 
Executive Order 12866, Regulatory Planning and Review. OMB determined 
that this proposed rule is a ``significant regulatory action'' as 
defined in section 3(f) of the Order (although not an economically 
significant regulatory action under the Order). Any changes made to 
this rule as a result of that review are identified in the docket file, 
which is available for public inspection in the office of the 
Department's Rules Docket Clerk, Room 10276, 451 Seventh Street, SW, 
Washington, DC 20410-0500.

Paperwork Reduction Act

    The information collection requirements contained in this final 
rule have been submitted to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and are 
pending OMB approval. In accordance with the Paperwork Reduction Act, 
HUD may not conduct or sponsor, and a person is not required to respond 
to, a collection of information unless the collection displays a 
currently valid OMB control number.
    The burden of the information collections in this rule is estimated 
as follows:

                                       Reporting and Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
                                                                                   Estimated
                                         Number of     Number of responses per    average time      Estimated
          Section reference               parties             respondent        for requirement   annual burden
                                                                                   (in hours)       (in hours)
----------------------------------------------------------------------------------------------------------------
 Sec.   200.202(b)(1) and (c)                  1,800   1 x .33                             .50              900
 (submission of evidence of
 compliance with AQB standards).
----------------------------------------------------------------------------------------------------------------

    In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments 
from members of the public and affected agencies concerning this 
collection of information to:
    (1) Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
    (2) Evaluate the accuracy of the agency's estimate of the burden of 
the proposed collection of information;
    (3) Enhance the quality, utility, and clarity of the information to 
be collected; and
    (4) Minimize the burden of the collection of information on those 
who are to respond, including through the use of appropriate automated 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    Interested persons are invited to submit comments regarding the 
information collection requirements in this proposal. Comments must be 
received within sixty (60) days from the date of this proposal. 
Comments must refer to the final rule by name and docket number (FR-
4620) and must be sent to:

Lauren Wittenberg, HUD Desk Officer, Office of Management and Budget, 
New Executive Office Building,

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Washington, DC 20503-0001, [email protected]
     and
Gloria Diggs, Reports Liaison Officer, Office of the Assistant 
Secretary for Housing-Federal Housing Commissioner, Department of 
Housing and Urban Development, 451 7th Street, SW, Room 9116, 
Washington, DC 20410-0001.

Environmental Impact

    This final rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
final rule is categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4332 et seq.).

Regulatory Flexibility Act

    The Secretary has reviewed this final rule before publication, and 
by approving it certifies, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), that this final rule will not have a 
significant economic impact on a substantial number of small entities. 
The reasons for HUD's determination are as follows.
    The final rule requires that appraisers on the Appraiser Roster 
have credentials that are based on the minimum licensing/certification 
standards issued by the AQB of the Appraisal Foundation. An analysis of 
the FHA Appraiser Roster indicates that of the approximately 22,163 
appraisers currently on the Appraiser Roster, only approximately 330 do 
not have licensing in conformance with the standards issued by the AQB. 
In most instances, these appraisers already have some of the hours of 
education or experience required to meet the AQB criteria, thus further 
minimizing the impacts of the final rule. For example, most appraisers 
on the Appraiser Roster have been listed for some time, and thus few of 
these appraisers will have difficulty providing evidence to their state 
board demonstrating acceptable experience levels. With regard to the 
education requirements, the AQB standards only require 90 hours of 
education for Licensed Real Property Appraiser and 120 hours of 
education for Certified Residential Real Property Appraiser 
certification. Given the few number of appraisers currently on the 
Appraiser Roster who do not have a state designation based on AQB 
criteria and the relatively little time and expense that would be 
required for most of these appraisers to meet AQB criteria, HUD has 
determined that the final rule will not have a significant economic 
impact on small entities.
    In addition to the new AQB standards, the final rule also clarifies 
that an appraiser may be removed from the Appraiser Roster if the 
appraiser loses his or her license or certification in any state due to 
disciplinary action, even if the appraiser continues to be licensed or 
certified in another state. The final rule also provides that an 
appraiser whose state license or certification in any state has been 
revoked, suspended, or surrendered as a result of a state disciplinary 
action, will be automatically suspended from the Appraiser Roster and 
prohibited from conducting FHA appraisals until HUD receives evidence 
demonstrating that the state imposed sanction has been lifted. An 
appraiser whose licensing or certification in a state has expired is 
automatically suspended from the Appraiser Roster in that state and may 
not conduct FHA appraisals in that state until HUD receives evidence 
that demonstrates renewal. An appraiser whose licensing or 
certification in a state has expired is automatically suspended from 
the Appraiser Roster in that state and may not conduct FHA appraisals 
in that state until HUD receives evidence that demonstrates renewal, 
but may continue to perform FHA appraisals in other states in which the 
appraiser is licensed or certified. To the extent that these changes 
have an impact on small entities it will be as a result of actions 
taken by the appraisers themselves (i.e., violation of applicable 
standards resulting in disciplinary action or otherwise failing to 
maintain their professional state licensing or certification).

Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') prohibits an agency 
from publishing any rule that has federalism implications if the rule 
either imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or the rule preempts state 
law, unless the agency meets the consultation and funding requirements 
of section 6 of the Executive Order. This final rule will not have 
federalism implications and will not impose substantial direct 
compliance costs on state and local governments or preempt state law 
within the meaning of the Executive Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments, and on the private sector. This final rule will not impose 
any federal mandates on any state, local, or tribal governments, or on 
the private sector, within the meaning of the Unfunded Mandates Reform 
Act of 1995.

List of Subjects in 24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Home improvement, Housing standards, 
Incorporation by reference, Lead poisoning, Loan programs--housing and 
community development, Minimum property standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.


0
Accordingly, for the reasons discussed in the preamble, HUD amends 24 
CFR part 200 as follows:

PART 200--INTRODUCTION TO FHA PROGRAMS

0
1. The authority citation for 24 CFR part 200 continues to read as 
follows:

    Authority:  12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d).

Subpart G--Appraiser Roster

0
2. In Sec.  200.202 revise paragraph (b)(1) and add paragraph (c) to 
read as follows:


Sec.  200.202  How do I apply for placement on the Appraiser Roster?

* * * * *
    (b) * * *
    (1) You must be a state-licensed or state-certified appraiser with 
credentials based on the minimum licensing/certification criteria 
issued by the Appraiser Qualifications Board (AQB) of the Appraisal 
Foundation. For purposes of this section, an appraiser is not deemed to 
have credentials based on AQB standards if the state licensing/
certification requirements did not conform to AQB criteria at the time 
the appraiser obtained the license or certification. This is true even 
if the state has subsequently adopted AQB criteria and has 
``grandfathered'' previously licensed or certified appraisers.
* * * * *
    (c) Delayed effective date of AQB requirements for appraisers 
currently

[[Page 26950]]

listed on the Appraiser Roster. An appraiser who is included on the 
Appraiser Roster on June 16, 2003, but does not meet the minimum AQB 
licensing/certification criteria in effect on this date, has until 12 
months following this date to comply with the AQB criteria and submit 
evidence of compliance to HUD. Failure to submit such evidence to HUD 
by the deadline date constitutes cause for removal under Sec.  200.204.

0
3. Amend Sec.  200.204 as follows:
0
a. Revise paragraph (a)(1);
0
b. Redesignate paragraphs (c) and (d) as paragraphs (d) and (e) 
respectively; and,
0
c. Add new paragraph (c):
    The addition and revision read as follows:


Sec.  200.204  What actions may HUD take against unsatisfactory 
appraisers on the Appraiser Roster?

* * * * *
    (a) * * *
    (1) Cause for removal. Cause for removal includes, but is not 
limited to:
    (i) Significant deficiencies in appraisals, including non-
compliance with Civil Rights requirements regarding appraisals;
    (ii) Losing standing as a state-certified or state-licensed 
appraiser due to disciplinary action in any state in which the 
appraiser is certified or licensed;
    (iii) Prosecution for committing, attempting to commit, or 
conspiring to commit fraud, misrepresentation, or any other offense 
that may reflect on the appraiser's character or integrity;
    (iv) Failure to perform appraisal functions in accordance with 
instructions and standards issued by HUD;
    (v) Failure to comply with any agreement made between the appraiser 
and HUD or with any certification made by the appraiser;
    (vi) Being issued a final debarment, suspension, or limited denial 
of participation;
    (vii) Failure to maintain eligibility requirements for placement on 
the Appraiser Roster as set forth under this subpart or any other 
instructions or standards issued by HUD; or,
    (viii) Failure to comply with HUD-imposed education requirements 
under paragraph (d) of this section within the specified period for 
complying with such education requirements.
* * * * *
    (c) Automatic suspension from Appraiser Roster.--(1) Appraisers 
subject to state disciplinary action. An appraiser whose state 
licensing or certification in any state has been revoked, suspended, or 
surrendered as a result of a state disciplinary action is automatically 
suspended from the Appraiser Roster and prohibited from conducting FHA 
appraisals in any state until HUD receives evidence demonstrating that 
the state imposed sanction has been lifted.
    (2) Expirations not due to state disciplinary action. An appraiser 
whose licensing or certification in a state has expired is 
automatically suspended from the Appraiser Roster in that state and may 
not conduct FHA appraisals in that state until HUD receives evidence 
that demonstrates renewal, but may continue to perform FHA appraisals 
in other states in which the appraiser is licensed or certified.
* * * * *

    Dated: May 9, 2003.
John C. Weicher,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 03-12205 Filed 5-15-03; 8:45 am]
BILLING CODE 4210-27-P