The Appraisal Foundation will establish a $1.22 million scholarship fund to help aspiring appraisers find “an alternative, more inclusive path” to meet experience requirements that it says contribute to a lack of diversity.
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Federal housing regulators announced a deal Thursday with the group responsible for setting standards and qualifications for real estate appraisers in an effort to open the field to more Black people and other people of color.
Officials with the U.S. Department of Housing and Urban Development (HUD) called the agreement with the Assessment Foundation “groundbreaking” and “historic.”
But the Assessment Foundation stressed that it had taken more than a dozen measures outlined in the agreement, including some implemented before HUD filed a “rare secretary-initiated complaint” in 2021, and found no wrongdoing.
The agreement calls for the Appraisal Foundation to create a $1.22 million scholarship fund to help aspiring appraisers find “an alternative, more inclusive path” to meet experience requirements that it says have contributed to a lack of diversity in the appraisal field.
In announcing the settlement, HUD said that last year, less than 1 percent of property appraisers and appraisers were black and 94.7 percent were white, according to the U.S. Bureau of Labor Statistics, making the field the most racially diverse of the 800 occupations surveyed. Least diverse professions.
The Appraisal Foundation’s experience requirements allegedly lead aspiring appraisers to “rely heavily on identifying friends or family members who are already licensed appraisers and are willing to oversee the on-the-job experience hours required to obtain a license, thus perpetuating homogeneity in the profession.” change”. said the HUD.
A large part of the solution that HUD and the Appraisal Foundation have agreed to implement is called the Practical Application of Real Estate Appraisal Program, or PAREA.
PAREA is an online program offered by the Appraisal Institute that provides simulations that show aspiring appraisers how to apply theory and methods to real-world examples.
The PAREA scheme also provides “guidance and coaching by valuers who hold the profession’s most recognized qualifications and have a combined 150 years of experience,” the Appraisal Institute said of the scheme.
“Today’s historic agreement will help create a class of appraisers based on what they know, not who they know,” Acting Secretary of Housing and Urban Development Adrian Todman said in a statement. “This settlement will help us get closer to eradicating housing discrimination and opening doors of opportunity for all.”
While HUD acknowledged that it did not issue any findings or determine that the Assessment Foundation violated the Fair Housing Act, it said the agreement is enforceable and “intended to address the issues raised in its 2021 complaint.”
The Assessment Foundation issued a statement saying it was pleased to reach a mediation agreement with HUD and listed more than a dozen initiatives that have been taken under the agreement, including funding the development of the PAREA module.
“We appreciate HUD’s recognition of our proactive efforts to lead the appraisal industry in welcoming a new generation of diverse appraisers and their support of our upcoming Supported by a scholarship program to assist newcomers in the field.
The scholarship program is a continuation of the foundation’s Path to Success program and “will support aspiring appraisers who fulfill experience requirements by completing the PAREA module,” the organization said. “More details, including eligibility and how to apply, will be announced when the scheme is officially announced.”
The Appraisal Institute, a professional association for real estate appraisers, is participating in the Appraiser Diversity Initiative with Fannie Mae, Freddie Mac and the National Urban League and offers scholarships, workshops and other resources to those interested in becoming appraisers.
Increasing diversity in the assessment industry is one of many goals outlined by the Biden administration in launching measures to combat assessment bias in 2022.
There have been previous media reports that black homes received higher assessment values after racial markers were removed, and evidence that the wealth gap is partly caused by a history of bias in home appraisals.
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