A.7.1.3 Applicability of USPAP to HUD/FHA

A. The Department has statutory authority (12 USC 1708(g)) to prescribe standards for the appraisal of all property to be insured by the Federal Housing Administration. Such appraisals shall be performed in accordance with generally accepted standards[80] by individuals who have demonstrated competence and whose professional conduct is subject to effective supervision. Under the MAP Program, HUD relies on the MAP Approved Lender to provide such supervision and their third-party appraisal may be relied upon to meet the statutory requirement. Additionally, the Department requires a USPAP-Compliant appraisal review by a HUD staff appraiser for all high- or medium-risk transactions.

B. The HUD Review Appraiser is required to opine on the quality of the appraisal and its reliability for use in underwriting a HUD-insured mortgage. A concurrence with the value or the development of an alternate value is not necessarily required.

C. USPAP consists of five sections: 1) Definitions, 2) Preamble, 3) Rules, 4) Standards and Standards Rules, and 5) Statements on Appraisal Standards. The ASB also publishes Advisory Opinions, which although are not a part of USPAP, provide illustrations of the applicability of Standards in specific situations and offer advice from the ASB for the resolution of specific appraisal issues and problems. Advisory Opinions 3, 14, and 16 are cited in the MAP Guide.

D. All of the Rules in USPAP apply to MAP Appraisers and HUD Review Appraisers. They consist of the Ethics Rule, Record Keeping Rule, Competency Rule, Scope of Work Rule, and Jurisdictional Exception Rule.