101.01: Licensing and Certification Requirements

We require a lender to use appraisers that are state-licensed or -certified (in accordance with the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989) to appraise the properties that secure mortgages it intends to deliver to us.  The lender (and any third-party originators it uses) must be aware of, and in full compliance with, state laws for licensing and certification of real estate appraisers.  The lender must document that the appraisers it uses are licensed or certified as appropriate under the applicable state law, either by including the license or certification number with the appraiser's list of qualifications that the lender has on file or by retaining a copy of the license or certification in the file the lender maintains for the appraiser.  The appraiser must note his or her license or certification number on the individual appraisal report forms.

When a new appraisal is required for a mortgage that a lender delivers to us, the lender warrants that the property has been appraised by a state-licensed or -certified appraiser.  Our appraisal report forms define the appraiser as the individual who personally inspected the property being appraised, inspected the exterior of the comparables, performed the analysis, and prepared and signed the appraisal report as the appraiser.  This definition does not preclude an appraiser from relying on individuals who are not state-licensed or -certified to provide significant professional assistance (such as an appraiser trainee or an employee of the appraiser doing market data research or data verification) in the development of the appraisal.  The state-licensed or -certified appraiser who signs the appraisal report must acknowledge in the report the extent of the professional assistance provided by others and the specific tasks performed by each such individual and must certify that the named individual(s) are qualified to perform the tasks.

Under some state laws, a lender's use of an unlicensed or uncertified appraiser who is working as an employee or subcontractor of a licensed or certified appraiser will satisfy the state's licensing and certification requirement, as long as the appraisal report is signed by a state-licensed or -certified "supervisory" or "review" appraiser.

If a lender is unable to make the required warranty regarding the use of a state-licensed or -certified appraiser because it is experiencing significant delays in obtaining appraisals as the result of a scarcity of state-licensed or -certified appraisers in the state or locality, it must document the individual mortgage file with a copy of an authorized temporary waiver of the appraiser licensing and certification requirements (or a copy of its letter requesting such a waiver).  Requests for these temporary waivers should be directed to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.