FHA Requirements vs USPAP
FHA Requirements vs USPAP – Appraisers Caught in Catch 22
The new FHA Handbook will become effective on September 14, 2015. There has been much discussion of the implications of changing “should” to “must” in thousands of examples in the Handbook.
As a Board member of the Arizona Association of Real Estate Appraisers as well as being on the FHA Roster, I have taken a good hard look at these requirements and then, it hit me as I was teaching the Uniform Standards of Professional Appraisal Practice (USPAP) which is the basis of appraisal standards for every appraiser in the United States. The FHA assignment conditions, whether under “should” to “must” force appraisers into a Catch 22 or turn down the FHA appraisal assignments. FHA is essentially making it a condition of employment that appraisers violate the Competency Rule. Why did I not see this before? I guess because the two never converged in my mind at the same time and I expect that is what has also happened to other appraisers.
|Competency Rule: 2014-2015 Uniform Standards of Professional Appraisal Practice
Lines 344-346: “An appraiser must: (1) be competent to perform the assignment; (2) acquire the necessary competency to perform the assignment; or (3) decline or withdraw from the assignment. In all cases, the appraiser must perform competently when completing the assignment.”
It is an FHA assignment condition that appraisers make the following statement within the report:
“The utilities were on and functioning at the time of inspection and the home meets 4150.2 & 4905.1 HUD Requirements,” and “Other intended users[of the report] are HUD/FHA.”
…the question is obvious, “Is an appraiser (you for example) qualified [competent] to make the statement that ‘the home meets 4150.2 & 4905.1 HUD Requirements?”
Please visit Arizona Association of Real Estate Appraiser (AAREA) for full story.