What are the Mortgagee’s responsibilities when selecting the appraiser?

The Mortgagee must order an appraisal from an Appraiser who is listed on the FHA Appraiser Roster and is qualified and knowledgeable in the specific market area in which the property is located.

The Mortgagee must evaluate the Appraiser’s education, training and actual field experience to determine whether the Appraiser has sufficient qualifications to perform the appraisal before assignment. 

The Mortgagee may not discriminate on the basis of race, color, religion, national origin, sex, age, disability, or actual or perceived sexual orientation and gender identity in the selection of an Appraiser. 

The Mortgagee may engage an Appraisal Management Company (AMC) to perform services related to obtaining an appraisal. The Mortgagee remains responsible for the acts of its AMC or third-party contractors. 

The Mortgagee may not allow the Appraiser to be selected, retained, managed, or compensated by a mortgage broker or any member of a Mortgagee’s staff who is compensated on a commission basis tied to the successful completion of a mortgage or who is not independent of the Mortgagee’s mortgage production staff or processes. 

For additional information see Handbook 4000.1 II.A.1.a.iii.(B)(6) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-04077