HUD Ends Investigation of the Appraisal Foundation with Agreement

On July 11, 2024, the Department of Housing and Urban Development (HUD) announced a Conciliation Agreement with The Appraisal Foundation (TAF). TAF is the private organization that sets qualifications and standards for the appraisal profession. HUD’s former Secretary Marcia Fudge filed a complaint against TAF alleging that its standards for training and qualification to enter the profession precluded access to communities of color. In turn, the resultant low share of Black and Latino appraisers was allegedly linked to higher rates of low appraisals in communities of color.

HUD did not issue findings against TAF or evidence of violations of the law or the Fair Housing Act. However, under the agreement, TAF will establish a $1.22 million scholarship fund to cover the costs of aspiring appraisers to utilize the Practical Applications of Real Estate Appraisal (PAREA) program. PAREA is a virtual program that enables candidates to obtain on-the-job experience required by TAF that can be hard to come by without industry connections. In addition, TAF agreed to market the PAREA program to communities of color and to collaborate with state licensing organizations to facilitate adoption of the program and its PAREA credit towards experience requirements.

NAR was one of the original organizations to sponsor TAF’s licensing and standards setting function for the industry in the early 1990s. That sponsorship entailed annual financial support for TAF in exchange for appointments on TAF’s Board of Trustees and Advisory Committee. Some fair housing and consumer groups questioned that relationship as potential “pay-for-play”, and, in the spring of 2024, NAR’s Executive Committee approved a motion of more general support for TAF’s licensing and standards setting function.

HUD’s Press Release

TAF’s Press Release