As a real estate appraiser, you know that independent, objective home appraisals and valuations are necessary to the homebuying and lending processes. Appraisal bias has never had a place in property valuation, as outlined in the ETHICS RULE in USPAP and the Fair Housing Act.
To continue to ensure objectivity and fairness in the valuation process, The Appraisal Foundation (TAF) now requires bias training for all appraisers, effective January 1, 2026. Specific requirements may vary by state, so be sure to verify all licensing and continuing education requirements with your state’s regulatory board.
In this post, we’ll provide further clarity on this complicated topic and connect you with the courses you need to stay current, compliant, and well-informed about issues related to fair housing and valuation equity.
Appraisal bias training is now required in most states—stay current with our Valuation Bias and Fair Housing Courses.
Summary
While both the Fair Housing Act and USPAP forbid appraisal bias in valuations, added concerns have led to new initiatives within the profession both at the national and state level, including the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE). The Appraisal Foundation (TAF) now requires bias training to help ensure objectivity and fairness in the valuation process.
What is Appraisal Bias?
Appraisal bias is bias tied to race, ethnicity, or nation of origin that factors into a property value given by a real estate appraiser. It has been suggested that appraisal bias has contributed to the wealth gap in communities of color across the nation.
It’s important to consider the background of this topic by looking at how the Fair Housing Act of 1968 and the Uniform Standards of Professional Appraisal Practice (USPAP) define bias in the appraisal process.
Fair Housing Act of 1968
The Fair Housing Act prohibits discrimination based on race, color, national origin, religion, familial status, or disability within the sale of housing. Property valuation directly affects the seller’s ability to recover their investment and enjoy the financial returns of owning a home. Appraisal bias is detrimental to this and can lead to long-term negative effects on an individual’s ability to build wealth.
The US Congress amended the Fair Housing Act in 1988 in order to prevent residential appraisers from considering race, sex, or other protected category when evaluating creditworthiness. Thus a discriminatory appraisal which leads to a denial of home financing may be in violation of federal law.
USPAP
In the ETHICS RULE of USPAP, bias is the “preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an assignment.”
With the 2024 USPAP update, the ASB revised the language within the ETHICS RULE to remove language that prohibited an appraiser from using or relying on “unsupported conclusions” about protected characteristics. This update was because there were misconceptions outside the profession that appraisal bias was permitted if an appraiser could support those conclusions.
This update also included a new Nondiscrimination section which indicates that appraisers “must not act in a manner that violates or contributes to a violation of federal, state, or local anti-discrimination laws or regulations.” This section references explicitly the Fair Housing Act, the Equal Credit Opportunity Act, and the Civil Rights Act of 1866.
These updates do not change how an appraiser completes valuations, and of course, discrimination has always been prohibited. But again, these updates provide clarity to those outside the profession.
How to Combat Unconscious Bias
Unconscious bias refers to thoughts and behaviors that we are unaware of, how they influence our day-to-day decisions, and how we interact with others. As appraisers, it can affect how we interact with clients, homeowners, and peers. Unconscious bias in valuation may also unintentionally affect our appraisal process and how we form an opinion of value.
Educating yourself on these issues, avoiding subjective terminology in your appraisal reports, using reputable data sources, and taking care to always comply with USPAP and Fair Housing laws can help you avoid unconscious appraisal bias and prevent unintended discrimination within the process.
Learning to recognize the various biases that influence appraisals and the steps you can take to reduce said biases is a good place to start.
Our Valuation Bias and Fair Housing Courses can help you learn to mitigate the impacts of appraisal bias. In the continuing education course—now required in most states—you’ll learn about issues related to fair housing, fair lending, bias, and discrimination as well as different types of bias and examples of how they might affect appraisals.
Property Appraisal and Valuation Equity (PAVE)
Following a report issued by Freddie Mac¹ that found credible concerns of inequality within the valuation process, in June 2021 the White House created the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE). The Task Force was made up of 13 federal agencies who evaluated the causes, extent, and consequences of appraisal bias and provided recommendations to combat this issue.
The Task Force issued The PAVE Action Plan in March 2022. One of the key initiatives of the Action Plan is to “Cultivate an appraiser profession that is well-trained and looks like the communities it serves.” The plan outlines several actions to remove barriers to the profession and “strengthen anti-bias, fair housing, and fair lending training of existing appraisers.”
Some of these recommended actions include:
- Strengthening guardrails against discrimination in all stages of residential valuation
- Enhancing fair housing and fair lending enforcement and driving accountability within the profession
- Building a diverse, well-trained, and accessible appraiser profession
- Empowering consumers to take action against concerns of appraisal bias
- Giving researchers and enforcement agencies better data to study and monitor valuation bias
One year later, The Appraisal Foundation issued a press release2 sharing updates on the various ways in which it is addressing the recommendations in The PAVE Action Plan. Highlights include updating the section of the 7-Hour National USPAP Update Course focused on bias and discrimination and conducting a comprehensive review of the ETHICS RULE.
Appraisal Bias Training and How It Will Support the Profession
Valuation bias training is critical to enhancing professionalism and ethical standards in the appraisal profession. Training programs are designed to help protect homebuyers, mortgage borrowers, and also property appraisers. Appraisers will benefit by gaining valuable knowledge and tools to mitigate legal risks, ensure regulatory compliance, and avoid violations and complaints.
Some of the first states to implement mandatory appraisal bias training (prior to 2026) were California, Minnesota, New York, Ohio, and Virginia. As of January 1, 2026, the Appraisal Qualifications Board (AQB) of The Appraisal Foundation (TAF) now requires that all state-credentialed real property appraisers complete the 7-hour Valuation Bias and Fair Housing Laws and Regulations (VB-FH) course.
Every two years thereafter, appraisers must take an approved 4-hour VB-FH course. Aspiring appraisers and those who are upgrading their current credentials must complete an 8-hour VB-FH course (7-hour + 1-hour exam).
The core components of effective valuation bias training are fair housing, fair lending, anti-bias, and anti-discrimination training. Some states (e.g., California) also require cultural competency training. The curriculum of a high-quality training course might include the following:
- A review of federal fair housing and fair lending laws and regulations
- A review of the fair housing complaint process and HUD and DOJ enforcement
- An in-depth examination of the concept of bias
- Examples of the different types of bias that may occur in real property valuations, including implicit (unconscious) bias
- Actions that an appraiser can take to avoid bias in appraisal development and reporting
- A review of the current edition of the Uniform Standards of Professional Appraisal Practice (USPAP) for guidance relating to bias and discrimination
- An overview of the ongoing struggle for fairness and equity in housing
When selecting a training program, it’s important to verify that the bias training curriculum satisfies your state’s specific coursework requirements (if any).
For example, California passed Assembly Bill 948 in September 2021. As of January 1, 2023, California real estate appraisers applying for their initial license must complete at least one hour of Cultural Competency education. Appraisers applying for license renewal in California must complete at least one hour of Cultural Competency and two hours of Elimination of Bias, which can be combined into a 3-hour training course.
Update: The new Valuation Bias and Fair Housing Course will satisfy the 2-hour Elimination of Bias course requirement, but it will not satisfy the 1-hour Cultural Competency requirement in California.
Avoid Appraisal Bias and Stay Compliant with McKissock’s VB-FH Courses
As the housing and lending industry continues to grapple with issues of bias and discrimination, a thorough grounding in fair housing requirements is more important than ever for appraisal professionals. McKissock Learning is dedicated to helping real estate appraisers get the qualifying and continuing education necessary to meet state requirements and gain valuable information and insight into the profession.
Remember, the best way to avoid appraisal bias is to embody the three operative words that define an appraiser—independence, impartiality, and objectivity. Even if your continuing education renewal deadline is still a year or more away, you can take proactive steps toward fair valuations by signing up for McKissock’s VB-FH course now.
Ready to start? Stay up to date and compliant with our Valuation Bias and Fair Housing Classes.
