7.2 Selection of Appraisers and Market Analysts

A. The Lender is responsible for the selection and approval of appraisers and market analysts who are familiar with MAP guidelines. Lenders must ensure that each selected appraiser and market analyst is qualified to appraise or perform market analyses for multifamily properties by reviewing their education, quality and frequency of multifamily appraisal experience, sample appraisals and market studies, professional affiliations, and state licenses or certifications. The ability to complete various HUD forms related to the appraisal (e.g., forms HUD-92264, 92273, 92274, etc.) is also a requirement. The Lender may assist the appraiser in the preparation of these forms, but the appraiser must sign them. Form HUD92264-A is an underwriting form prepared by the MAP Lender’s Underwriter and is not a required appraisal exhibit.

B. The appraiser or the market analyst must be independent of, and may not be affiliated with, the loan originator, broker, Developer, Borrower, MAP Lender, or any individual or institution involved in any other financial role in the application. The Underwriter shall not act as the appraiser or market analyst.

C. The MAP Lender’s responsibility for supervision of the appraisal and market study (and any other third-party reports) requires that the third-party appraiser be selected by the MAP Lender’s Underwriter. The appraisal must be ordered and paid for by the MAP Lender, and not by the originator, broker, Developer, or Borrower. The appraisal must identify HUD as an intended user of the report. Appraisals prepared by any entity not engaged and paid for by the Lender are not acceptable and will not meet HUD’s appraisal requirements.

D. The market study should be ordered and paid for by the Lender. However, a market study that has been prepared for the Borrower by a third-party market analyst and meets all other market study requirements of the Guide, including timeliness, is acceptable. The Lender is responsible for the review and acceptance of all market studies submitted with the application.

E. In accordance with the Fair Housing Act, there shall be no discrimination on the basis of race, color, national origin, religion, sex, disability, or familial status in the selection of an appraiser or market analyst. Discrimination by age is also prohibited by the Age Discrimination Act of 1975. The Equal Access Rule (24 CFR 5.105(a)(2)) provides for non-discrimination based upon actual or perceived sexual orientation, gender identity, or marital status.

F. HUD reserves the right to examine the credentials of all appraisers and market analysts hired by the Lender, and to reject any individuals that it considers unqualified. HUD staff with concerns about a third party’s capability, competence, or experience should contact the Counterparty Oversight Branch (COB) through their supervisory chain. HUD will not reject any third-party contractor without having first issued warning letters to the Lender highlighting the areas of non-compliance in their submitted reports. Thirdparty contractors will be afforded the right of appeal and due process in defending their work, consistent with COB procedures.

G . HUD does not formally approve appraisers or appraisal firms as being “MAP Approved.” Rather, the MAP Lender is responsible for ensuring the professionalism and competence of its contracted appraiser as well as the quality of the ultimate appraisal product submitted as a component of the Lender’s application.

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Chapter 7 Valuation & Market Analysis 7.3 Appraiser and Market Analyst Qualifications

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H. The most current appraiser Certification required by USPAP must be signed by the appraiser. In addition, the appraiser must include a certification that the racial/ethnic composition of the neighborhood surrounding the project in no way affected the appraisal determination.