The Federal Housing Administration published Mortgagee Letter (ML) 21-27 to reinforce the agency’s commitment to preventing racial bias in the valuation of single family properties.
The ML clarifies FHA’s expectations of appraisers and mortgagees, which are to comply with all applicable anti-discrimination laws, including the Fair Housing Act, as they relate to appraisals for FHA Single Family Title II forward and reverse mortgage programs. The guidance in the ML also:
- updates the appraiser’s post-approval requirements to emphasize compliance with all applicable laws, including the Fair Housing Act, and all other federal, state, and local antidiscrimination laws;
- adds clarifying language to the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Sections A.1.a.iii(B)(6)(a) (Appraisal Integrity), and II.A.3.a.v (Quality of Appraisal) to emphasize the requirement for the mortgagee to ensure the appraisal complies with all applicable laws including the Fair Housing Act and all other federal, state, and local antidiscrimination laws; and
- restructures Handbook 4000.1, Section II.D.2 (General Appraiser Requirements) to better clarify guidance specific to Nondiscrimination Policy; compliance with FHA guidelines and Uniform Standards of Professional Appraisal Practices; and Appraiser Conduct.
Stakeholders must review and familiarize themselves with the changes outlined in this ML to ensure they are in compliance with the Fair Housing Act and other anti-discriminatory laws. The policy updates will be incorporated in a future version of Handbook 4000.1.