Today, the Biden-Harris Administration is highlighting progress made to ensure that every American who buys a home has the same opportunities to build generational wealth through homeownership.
One year ago today, the Biden-Harris Administration’s Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) – led by U.S. Department of Housing and Urban Development (HUD) Secretary Marcia L. Fudge and White House Domestic Policy Advisor Ambassador Susan Rice – released the PAVE Action Plan, the most wide-ranging set of actions ever announced to advance equity in the home appraisal process. Bias in home valuations limits the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap.
In just 12 months, the PAVE Task Force has made critical progress towards fully implementing the Action Plan, including by empowering consumers with new tools and greater awareness of appraisal bias; leveraging data to identify trends and crack down on offenders of appraisal bias; and supporting a well-trained and dynamic appraiser profession.
The Action Plan addresses a real harm. For example: at the White House’s release of the Action Plan last year, homeowner Tenisha Tate-Austin spoke about her experience with misvaluation. Her family’s home was appraised at roughly $500,000 more than its initial appraised value after having a white friend stand in for them. Earlier this month, the Tate-Austins settled a housing discrimination lawsuit. The U.S. Department of Justice had filed a statement of interest in their case early last year.
Over the last year, the Biden-Harris Administration has executed on the PAVE Action Plan by:
- Empowering consumers to take action against appraisal bias. Consumers who seek to finance or re-finance a home are often unaware of their options when they receive a lower-than-expected valuation. In January 2023, HUD published draft guidance to make it easier and quicker for prospective borrowers applying for Federal Housing Administration (FHA)-insured loans to request a Reconsideration of Value (ROV) on a property if the initial valuation is lower because of suspected illegal bias. This week, HUD awarded $54 million to 182 fair housing organizations across the country. Eligible activities for the funding included testing for appraisal bias, enforcement activities and educating local communities on the issue. Further, earlier this year the federal Appraisal Subcommittee held its first-ever hearing, dedicated to the topic of appraisal bias. The hearing brought together federal agencies and industry experts to define the problem and discuss potential solutions.
- Increasing transparency and leveraging federal data to inform policy and improve enforcement against appraisal bias. In October 2022, the Federal Housing Finance Agency (FHFA) published the first-ever publicly available datasets of aggregate statistics on appraisal records, providing the public with access to the data and trends found in appraisal reports. Using these new data, academic researchers have already published new analyses illustrating stark differences in home valuations across racial and ethnic groups. FHFA, along with HUD, USDA and VA, are working to build a Federal database to share appraisal data across the Federal government; the database could allow agencies to share enhanced oversight and enforcement actions, and could facilitate new research related to property valuation.
- Cultivating an appraiser profession that is well-trained and looks like the communities it serves. As outlined in the PAVE Action Plan, the Biden-Harris Administration is taking steps to remove unnecessary educational and experience requirements that make it difficult for underrepresented groups to access the profession and to strengthen anti-bias, fair housing, and fair lending training of existing appraisers. In January 2023, the Department of Veterans Affairs (VA) released new guidance to its appraiser workforce. Among other steps, the guidance enhances oversight procedures to detect potential discriminatory bias in appraisal reports filed by VA fee panel appraisers, and calls upon all VA fee panel appraisers and lender-approved staff to participate in appraisal bias, fair housing, and fair lending training. In addition, last year, the federal Appraisal Subcommittee awarded a grant to the state of Mississippi to create an innovative pathway to appraiser licensure, including for appraisers from underrepresented groups, and with a particular focus on underserved communities within the State where there is a shortage of appraisers. Mississippi’s success has inspired several other states to express interest in replicating the program.
In conjunction with the release of the PAVE Action Plan, last year the Biden-Harris Administration launched pave.hud.gov/gethelp. Consumers who suspect misvaluations due to racial bias may use this portal to learn about their rights and steps they can take to file a discrimination complaint.