Introduction to Appraisals An appraisal is a point-in-time opinion of value. In order to issue a home loan, the lender (typically a bank) must conduct an appraisal to determine the value of the home they will finance under a home mortgage loan (for a purchase or refinance transaction). Simply put, the bank needs to know how much money the home is worth. The appraiser's scope of work typically includes: the type of property inspection (interior, exterior only, or no inspection); what approaches to value are required (sales comparison, cost, or income); and any lender-specific requirements. Appraisals are important because they affect how much people make when they sell their home, how much people pay when buying a home, and how much equity people can pull out of their home when refinancing.

Learn About Appraisal Bias

Accounting for the breadth of the literature, evidence suggests that racial and ethnic bias has been a contributing factor to the depressed values that appraisers in purchase transactions assign to properties in majority-Black and -Latino neighborhoods. Evidence also suggests that racial and ethnic bias affects refinance valuations as well. Via this mechanism, Black homeowners today are losing wealth-building potential in part because of the perpetuation of historical discrimination and segregation.

Property appraisals used in real estate transactions and mortgage lending are not the only valuations that may be vulnerable to racial and ethnic bias. Many jurisdictions generate revenue through a property tax that is based on a home's assessed value.

As with property appraisals, there is a legacy of racial discrimination in property tax assessments, though it is driven by different factors than those of residential lending valuations. This effect has taken the form of systemic relative overassessment of Black-owned properties and neighborhoods for taxation, and therefore relatively higher tax burdens.

The increased costs of higher tax burdens may be capitalized into lower sales prices. This may result in lower market value in historically marginalized neighborhoods, thus piling on to the apparent impact of racial and ethnic bias in mortgage transaction valuations. The Task Force has focused on appraisals performed in support of residential lending but is aware that appraisals are not the only form of property valuation that affect communities of color.

White House Event: Rooting out Appraisal Bias

Rooting out Bias in Home Appraisals: The PAVE Task Force Action Plan to the President
The White House
www.youtube.com/embed/P3Tq8JZ-SXY

View Trainings and Other Resources

View past training webinars about appraisal bias. More resources coming soon.

HUD Webinar   July 29, 2021 Advancing Equity in the Appraisal Process A panel of experts from HUD, Urban Institute, Brookings Metropolitan Policy Program, Zillow, the National Association of Hispanic Real Estate Professionals, and the National Fair Housing Alliance (NFHA) discussed how to advance equity in the home appraisal process. www.huduser.gov/portal/event/quarterlyupdate-July2021.html

HUD-NFHTA Webinar   June 1, 2021 Collateral Damage: The Consequences of Racial Bias in the Residential Appraisal Process The National Fair Housing Alliance (NFHA) partnered with the National Fair Housing Training Academy (NFHTA) to host a public forum that explored how fair housing laws can be used to challenge discriminatory appraisals and help build wealth in communities of color. www.hudexchange.info/trainings/courses/collateral-damage-the-consequences-of-racial-bias-in-the-residential-appraisal-process/

HUD-NFHTA Webinar   September 15, 2021 Strategies for Investigating Discriminatory Residential Appraisals The National Fair Housing Training Academy (NFHTA) and the National Fair Housing Alliance (NFHA) hosted a public forum focusing on understanding the fundamentals of the appraisal process, comprehensive strategies and approaches to conducting appraisal bias investigations, and exploring discriminatory impact and treatment theory in appraisal investigations. www.hudexchange.info/trainings/courses/nfhta-forum-strategies-for-investigating-discriminatory-residential-appraisals/

Browse the PAVE Press Room

Stay up to date with the latest news on PAVE's work.

 

Press Releases

	HUD Charges Appraiser, Appraisal Management Company, and Lender with Race Discrimination [HUD; 07/15/2024]
	HUD Reaches Groundbreaking Settlement with The Appraisal Foundation to Ensure Equal Opportunity in the Appraisal Profession [HUD; 07/11/2024]
	FACT SHEET: President Biden Announces Key Progress on Efforts to Close the Racial Wealth Gap (www.whitehouse.gov/briefing-room/statements-releases/2024/04/12/fact-sheet-president-biden-announces-key-progress-on-efforts-to-close-the-racial-wealth-gap/) [White House; 04/12/2024]
	HUD Issues New Guidance to Protect Borrowers from Appraisal Bias [HUD; 05/01/2024]
	FACT SHEET: Biden-?Harris Administration Takes Sweeping Action to Address Racial Bias in Home Valuations (www.whitehouse.gov/briefing-room/statements-releases/2023/06/01/fact-sheet-biden-harris-administration-takes-sweeping-action-to-address-racial-bias-in-home-valuations/) [White House; 06/01/2023]
	FHFA Releases 2023 Q4 Uniform Appraisal Dataset (UAD) Aggregate Statistics with New Variables (www.fhfa.gov/news/news-release/fhfa-releases-2023-q4-uniform-appraisal-dataset-uad-aggregate-statistics-with-new-variables) [FHFA; 03/02/2024]
	HUD Announces Partnership with the National Association of Real Estate Brokers (NAREB) to Address Appraisal Bias and Discrimination [HUD; 08/02/2023]
	Agencies request comment on quality control standards for automated valuation models proposed rule (www.federalreserve.gov/newsevents/pressreleases/bcreg20230601a.htm) [Federal Reserve; 06/01/2023]
	Agencies Propose Interagency Guidance on Reconsiderations of Value for Residential Real Estate Valuations (www.consumerfinance.gov/about-us/newsroom/agencies-propose-interagency-guidance-on-reconsiderations-value-residential-real-estate-valuations/) [Consumer Finance; 06/08/2023]
	FHFA Expands Uniform Appraisal Dataset (UAD) Aggregate Statistics with New Measures and New Quarterly Data (www.fhfa.gov/news/news-release/fhfa-expands-uniform-appraisal-dataset-uad-aggregate-statistics-with-new-measures-and-new-quarterly) [FHFA; 06/29/2023]
	FACT SHEET: Biden-?Harris Administration Tackles Racial and Ethnic Bias in Home Valuations (www.whitehouse.gov/briefing-room/statements-releases/2023/03/23/fact-sheet-biden-harris-administration-tackles-racial-and-ethnic-bias-in-home-valuations/) [FHFA; 03/23/2023]
	HUD Secretary Announces Step Towards Addressing Bias in the Home Appraisal Process for People Seeking FHA Financing [HUD; 01/12/2023]
	Biden-Harris Administration Unveils Action Plan of Wide-Ranging Set of Reforms to Advance Equity in Appraisals [HUD; 03/23/2022]
	Fact Sheet: Biden-Harris Administration Releases Action Plan to Address Racial and Ethnic Bias in Home Valuations [HUD; 03/23/2022]
	Fact Sheet: Biden-Harris Administration Releases Action Plan to Address Racial and Ethnic Bias in Home Valuations (www.whitehouse.gov/briefing-room/statements-releases/2022/03/23/fact-sheet-biden-harris-administration-releases-action-plan-to-address-racial-and-ethnic-bias-in-home-valuations/) [The White House; 03/23/2022]
	Statement from Secretary Marcia L. Fudge on Black Homeownership Remaining Lower Than a Decade Ago Despite the U.S. Homeownership Rate Experiencing Largest Annual Increase on Record [HUD; 02/24/2022]
	Appraisal discrimination is illegal under federal law (www.consumerfinance.gov/about-us/blog/appraisal-discrimination-illegal-under-federal-law/) [Consumer Financial Protection Bureau; 02/04/2022]
	Readout of Interagency Task Force Meeting on Property Appraisal and Valuation Equity (PAVE) (www.whitehouse.gov/briefing-room/statements-releases/2021/11/17/readout-of-interagency-task-force-meeting-on-property-appraisal-and-valuation-equity-pave/) [The White House; 11/17/2021]
	PD&R Quarterly Update: Advancing Equity in the Home Valuation Process (www.huduser.gov/portal/pdredge/pdr-edge-featd-article-090721.html) [HUD; 09/07/2021]
	Readout of the First Interagency Task Force Meeting on Property Appraisal and Valuation Equity (PAVE) (www.whitehouse.gov/briefing-room/statements-releases/2021/08/05/readout-of-the-first-interagency-task-force-meeting-on-property-appraisal-and-valuation-equity-pave/) [The White House; 08/05/2021]

News Media Features

	US Plan Aims to End Racial, Ethnic Bias in Home Appraisals (www.usnews.com/news/business/articles/2022-03-23/biden-admin-to-release-plan-to-stop-bias-in-home-appraisals) [Associated Press; 03/23/2022]
	Biden administration to fight racial bias in U.S. real estate appraisals (www.reuters.com/world/us/biden-administration-fight-racial-bias-us-real-estate-appraisals-2022-03-23/) [Reuters; 03/23/2022]
	Biden Administration to Tackle Racial Disparities in Home Valuations (www.bloomberg.com/news/articles/2022-03-23/white-house-plantackles-racial-bias-in-home-appraisals) [Bloomberg; 03/23/2022]
	Biden administration tackles racial bias in home appraisals (www.cnn.com/2022/03/23/success/biden-equity-home-value-appraisals/index.html) [CNN; 03/23/2022]
	Why even the wealthiest Black communities are undervalued by home appraisers (www.washingtonpost.com/business/2022/03/23/home-appraisal-racial-bias/) [The Washington Post; 03/23/2022]
	White House releases plan for combating inequities in home appraisals (www.americanbanker.com/news/white-house-releases-plan-for-combating-inequities-in-appraisals) [American Banker; 03/23/2022]
	Biden Administration Unveils Plan to Tackle Racism in Home Appraisals (www.theroot.com/biden-administration-unveils-plan-to-tackle-racism-in-h-1848691549) [The Root; 03/23/2022]
	Biden administration unveils plan to fight bias in home appraisals (https://thehill.com/homenews/administration/599436-biden-administration-unveils-plan-to-fight-bias-in-home-appraisals) [The Hill; 03/23/2022]
	PAVE Task Force Presents Action Plan On Appraisal Bias To Biden - NMP (https://nationalmortgageprofessional.com/news/pave-task-force-presents-action-plan-appraisal-bias-biden) [National Mortgage Professional; 03/23/2022]
	VP Harris Releases Plan to Stop Bias in Home Appraisals (www.washingtoninformer.com/vp-harris-releases-plan-to-stop-bias-in-home-appraisals/) [The Washington Informer; 03/23/2022]
	Biden Administration To Probe Racial Bias In Home Appraisals (www.forbes.com/sites/brendarichardson/2022/03/23/biden-administration-to-probe-racial-bias-in-home-appraisals/?sh=648d8647a5a9) [Forbes; 03/23/2022]
	New report shows home appraisal bias is widespread; contributes to wealth gap (www.wusa9.com/article/money/home-appraisal-bias-is-widespread-according-to-new-report/65-4804c14b-5d65-4494-ab7a-74ffba184e31) [WUSA9; 03/23/2022]
	Biden, Harris take aim at bias in home appraisals: 'Owning a home ... means a shot at a better future' (www.ny1.com/nyc/all-boroughs/politics/2022/03/23/biden--harris-take-aim-at-bias-in-home-appraisals) [NY1; 03/23/2022]
	Was your home appraisal low because you're Black? HUD Secretary Marcia Fudge releases new report on stopping racially biased home appraisals (www.cleveland.com/open/2022/03/was-your-home-appraisal-low-because-youre-black-hud-secretary-marcia-fudge-releases-new-report-on-stopping-racially-biased-home-appraisals.html) [Cleveland.com; 03/23/2022]
	Remote Appraisals of Homes Could Reduce Racial Bias (www.nytimes.com/2022/03/21/realestate/remote-home-appraisals-racial-bias.html) [New York Times; 03/21/2022]
	Freddie Mac Finds 'Pervasive' Bias in Home Appraisal Industry (www.bloomberg.com/news/articles/2021-09-28/study-finds-widespread-racial-disparities-in-appraisals) [Bloomberg News; 09/30/2021]
	Thousands of home appraisals may contain racially biased language, federal regulator finds (www.marketwatch.com/story/one-spicy-neighborhood-thousands-of-home-appraisals-may-contain-racially-biased-language-federal-regulator-finds-11639529530) [MarketWatch; 12/15/2021]
	HUD official talks appraisal bias task force (www.housingwire.com/articles/hud-official-talks-appraisal-bias-task-force/) [HousingWire; 11/04/2021]
	Susan Rice to co-chair HUD appraisal task force (www.housingwire.com/articles/susan-rice-to-co-chair-hud-appraisal-task-force/) [HousingWire; 07/29/2021]
	HUD appraisal task force holds first meeting to address racial bias (www.nationalmortgagenews.com/news/hud-home-appraisal-task-force-meets-to-address-racial-disparities) [National Mortgage News; 08/06/2021]