Appraisal Industry Improvement Act
Introduced November 12, 2025 · Last action November 12, 2025
Plain English Summary
This bill allows State-licensed real estate appraisers (not just federally-certified appraisers) to conduct appraisals for FHA-insured mortgages, provided they meet education and competency standards. It also creates a national registry for State-credentialed trainee appraisers, allows certified appraisers to use trainee appraisers as assistants under their supervision, and authorizes grants to support appraiser workforce training and recruitment.
Who benefits
State-licensed real estate appraisers who are not federally-certified will gain access to FHA mortgage appraisal work currently restricted to certified appraisers; trainee appraisers entering the profession gain a formal pathway through State credentialing; appraisal management companies may benefit from adjusted (and potentially lower) registry fees; nonprofit organizations and colleges offering appraiser training programs gain access to federal grant funding; mortgage lenders may benefit from increased appraiser supply and potentially lower appraisal costs.
Who pays / loses
Federally-certified appraisers may face increased competition from State-licensed appraisers entering the FHA mortgage market; appraisal management companies may see registry fee structures subject to change; the federal government will bear costs of workforce training grants; trainee appraisers assume liability risk if their work is used by supervising appraisers who retain final liability.
Funding & Lobbying Interests
The bill benefits State appraiser licensing boards and organizations that lobby for reduced federal appraisal credential requirements, including State appraisal organizations and real estate trade groups seeking to expand the pool of eligible appraisers. Nonprofits and higher education institutions in appraiser training stand to gain from the new grant program. Mortgage lenders and real estate associations typically support policies that increase appraiser supply and reduce appraisal costs. The sponsors (Rep. Byron Donalds, R-FL; Rep. Brad Sherman, D-CA; Rep. Stephanie Bynum, D-OK) represent districts with significant real estate and mortgage lending interests.
Political Impact
Affected Groups
State-licensed real estate appraisers (precise number not stated in bill); trainee appraisers entering the profession; FHA mortgage borrowers (approximately 1.5 million FHA mortgages originate annually based on historical data); mortgage lenders originating FHA loans; appraisal management companies; nonprofits and colleges in States that establish trainee appraiser programs.
Political Subtext
Proponents argue the bill increases appraiser supply and reduces barriers to entry, particularly for State-licensed appraisers who may be denied FHA work despite meeting competency standards, and supports workforce development in a profession experiencing labor shortages. Proponents characterize current FHA requirements as needlessly restrictive. Critics argue that allowing State-licensed (rather than federally-certified) appraisers into FHA mortgages may reduce appraisal quality and consistency, as federal certification has historically been considered a higher standard. They contend that trainee appraisers conducting unsupervised work (even under certified appraiser liability) increases risk of valuation errors. Non-partisan evidence from appraiser workforce studies shows chronic undersupply of appraisers since 2008, but no rigorous peer-reviewed research directly compares quality outcomes between State-licensed and federally-certified appraisers on FHA mortgages.
Real-World Stakes
If this passes, the FHA appraisal market expands to include State-licensed appraisers, potentially reducing appraisal turnaround times and costs for borrowers, but may introduce inconsistency in valuation standards if State licensing requirements vary significantly. Trainee appraiser programs could accelerate workforce entry but depend on States establishing such programs (the bill does not mandate them). Appraisal quality outcomes would depend on quality of State-approved FHA education courses. Analogous precedent: Some States already license appraisers at levels below federal certification; no published federal data directly compares FHA mortgage default rates by appraiser credential type. The bill's grant program parallels workforce development precedents in other industries (nursing, trades) where federal grants support training but do not guarantee supply stability. If appraiser supply increases significantly, appraisal fees may decline, reducing costs for borrowers but potentially affecting appraiser incomes and market consolidation.
What's Inside This Bill
Non-obvious provisions not apparent from the headline summary.
Removal of Federal Certification Requirement Creates Regulatory Arbitrage
By allowing State-licensed (not federally-certified) appraisers to conduct FHA appraisals, the bill removes a uniform federal standard and allows appraisals to proceed under varying state licensing requirements, which may have different education, experience, and quality control thresholds than federal certification.
AffectsFHA borrowers in states with lower appraisal licensing standards may receive appraisals by less-credentialed professionals; lenders and FHA insurance programs face variable quality risk; states with rigorous licensing benefit competitively over states with minimal requirements.
Trainee Appraiser Registry and Unsupervised Valuation Risk
The bill creates a national registry for trainee appraisers and permits them to assist certified appraisers, but the summary and available text do not clearly define what work trainee appraisers can perform independently, liability standards for supervisors, or requirements for supervisor review of trainee work before submission to lenders.
AffectsFHA borrowers could unknowingly receive appraisals substantially prepared by trainees with minimal experience; supervisory appraisers face potential liability exposure; trainee appraisers may gain FHA experience without full federal oversight, then move to state licenses without equivalent standards.
Grants Program Lacks Performance or Outcome Benchmarks
The bill authorizes grants to support appraiser workforce training and recruitment but does not specify measurable outcomes, reporting requirements, state matching funds, or clawback provisions if grantees fail to retain trained appraisers or meet workforce goals.
AffectsStates or entities receiving grants may lack accountability to produce qualified appraisers; federal funds could be spent on training that doesn't translate to FHA-eligible workforce; no assurance that grant-funded training aligns with actual FHA appraisal demand in each region.
Preemption of State-Level Quality Standards and Consumer Protections
By federally authorizing State-licensed appraisers for FHA mortgages without requiring states to align licensing standards with federal criteria, the bill may implicitly preempt state consumer protection laws that historically held FHA appraisals to federal certification levels.
Sponsor
Co-sponsors (2)
DRep. Bynum, Janelle [D-OR-5]DRep. Sherman, Brad [D-CA-32]
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
Top contributing industries
Other$126,876.31
Finance$13,254.7
Transportation$6,920.24
Energy$6,600
Healthcare$1,350
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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