RD Instruction 1922-A

PART 1922 - APPRAISAL

Subpart A - Implementation of the Financial Institutions Reform,
Recovery

and Enforcement Act (FIRREA) of 1989

## [TABLE OF CONTENTS]{.underline}

[Sec]{.underline}. [Page]{.underline}

1922.1 Purpose. 1

1922.2 Scope and OMB guidelines. 1

\(a\) Intended scope. 1

\(b\) OMB Circular A-129 (Rev.) guidelines

for Rural Development loans and grants. 1

1922.3 Definitions. 1

1922.4 Responsibility. 2

1922.5 Rural Development contract real estate appraisers. 3

1922.6 Training needs for Rural Development full-time and part-time

State designated appraisers. 3

\(a\) Training for Rural Development full-time State

designated appraiser. 3

\(b\) Training for Rural Development part-time State

designated appraiser. 4

1922.7 Training needs for Rural Development full-time State

designated appraiser/reviewer. 4

1922.8 Rural Development real estate appraisals for

guaranteed loans. 4

1922.9 Reimbursement of fees and dues for State-

certified general appraisers. 4

1922.10 Uniform Standards of Professional Appraisal

Practice (USPAP). 5

\(a\) Rural Development real estate appraisals. 5

\(b\) Rural Development real estate appraisal reviews. 5

1922.11 Administrator\'s exception authority. 6

1922.12 - 1922.50 \[Reserved\] 6

Exhibit A - RURAL DEVELOPMENT REAL ESTATE APPRAISER REQUIREMENTS

Exhibit B - MINIMUM TRAINING CURRICULUM REQUIREMENTS

Exhibit C - REQUIRED CURRICULUM

Exhibit D -- RURAL DEVELOPMENT APPRAISAL

CERTIFICATION PROGRAM SEMI-ANNUAL REPORT

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RD Instruction 1922-A

PART 1922 - APPRAISAL

Subpart A - Implementation of the Financial Institutions Reform,
Recovery

and Enforcement Act (FIRREA) of 1989

§1922.1 [Purpose]{.underline}.

This Instruction establishes the policies and procedures within Rural
Development to conform to the provisions of the Office of Management and
Budget (OMB) Circular A-129 (Rev.) and other guidelines concerning the
implementation of the FIRREA.

§1922.2 [Scope and OMB guidelines]{.underline}.

\(a\) [Intended scope]{.underline}. These provisions apply to all
appraisals of [real estate]{.underline} required for Rural Development
direct and guaranteed loans and grants. The provisions include
appraisals required during loan making and loan servicing. This
Instruction is not intended to require a real estate appraisal to be
obtained when other Rural Development Instructions do not require an
appraisal.

\(b\) [OMB Circular A-129 (Rev.) guidelines for Rural Development loans
and grants]{.underline}. The OMB Circular A-129 (Rev.), dated January
11, 1993, and current OMB guidelines were followed in the implementation
of the general policies and training set out in this Instruction.

§1922.3 [Definitions]{.underline}.

[Rural Development certificate of training]{.underline}. Training
certification issued to full- time designated appraisers for completion
of 165 hours of training as set out in Exhibits B and C of this
Instruction.

[Rural Development full-time State designated appraiser]{.underline}.
Full-time appraiser employees (GM-1171, GS-1171, or GS-301) who are, or
will have, State-certified general status within 3 years from date of
designation.

[Rural Development full-time State designated
appraiser/reviewer]{.underline}. Full-time appraiser (GM-1171, or
GS-1171 or GS-301, etc.) having sufficient technical training to conduct
technical reviews (desk and field) in accordance with appropriate Rural
Development Instructions and Standard 3 of the Uniform Standards of
Professional Appraisal Practice (USPAP).

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DISTRIBUTION: WSDC Real Property

Appraisal

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RD Instruction 1922-A

§1922.3 (Con.)

[Rural Development part-time State designated appraiser]{.underline}.
Part-time appraiser (County Supervisors, Assistant County Supervisors,
or State Office employees who are GS-475 or GS-1165) for loans or
servicing transactions wherein the customer\'s total indebtedness on the
real estate security property to Rural Development and other lenders is
or will be [under]{.underline} \$100,000. Part-time appraisers must be
designated as \"part-time appraisers\" and have current training to meet
assigned duties.

[Rural Development transaction value]{.underline}. The value arrived at
to determine whether Rural Development\'s \$100,000 limitation has been
met. It is to be used by Rural Development designated appraisers
(in-house) to determine who will conduct the appraisal for Rural
Development direct loan making and servicing. The Rural Development
transaction value [is]{.underline} the customer\'s total indebtedness on
real estate security property to Rural Development and other lenders and
it includes those loans or transactions that [will]{.underline} be made.

[State-certified general real property appraiser]{.underline}.
State-certified appraiser authorized under State law to appraise all
types of real estate at all levels. The State-certified general real
property appraiser is authorized to complete Rural Development
appraisals in accordance with appropriate Rural Development Instructions
and involving loans or servicing transactions with no dollar limitation.
(State appraisal authorities\' definitions may differ.)

[State-certified residential real property appraiser]{.underline}.
State-certified appraiser authorized under State law to appraise all
real estate consisting of one to four residential units without regard
to transaction value or complexity. (State appraisal authorities\'
definitions may differ.)

[State-licensed real property appraiser]{.underline}. State-licensed
appraiser authorized under State law to appraise all noncomplex one to
four residential units having a transaction value less than \$1 million
and complex one to four residential units having a transaction value
less than \$250,000. (Note: This is The Appraisal Foundation definition.
State appraisal authorities\' definitions may differ.)

§1922.4 [Responsibility]{.underline}.

State Directors will be responsible for implementing the provisions of
this Instruction. State Directors have the responsibility to maintain
adequate training funds to meet the 3-year training program for Rural
Development full-time State designated appraisers as set out in
§1922.6(a) of this Instruction. By August 1 each year, all Rural
Development State Directors must make a request in writing for appraisal
training funds. The request must include the following: name of the
individual; dates and names of courses to be taken in the coming fiscal
year; course hours accredited by the State Appraisal Board; and a list
of courses successfully completed with

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RD Instruction 1922-A

§1922.4 (Con.)

indication of the hours accredited by the State Appraisal Board for each
course in accordance with Categories 1 through 4 of Exhibit C of this
Instruction. Written requests for training funds and the completed
Exhibit D of this Instruction used to request the Rural Development
certificate of training, must be addressed to Rural Development, Human
Resources Development and Training Staff, Ag Box 0732, Washington, DC
20250. For real estate appraisals completed for Rural Development direct
real estate loan customers, State Directors are also responsible for
determining whether the appraisal will be completed by Rural Development
State designated appraisers (in-house) or contracted out.

§1922.5 [Rural Development contract real estate appraisers]{.underline}.

\(a\) All Rural Development contract real estate appraisers are to meet
the FIRREA certification or licensing requirements implemented by the
State in which the real estate is located, as set out in Exhibit A of
this Instruction.

\(b\) The statement of work in the contract should reflect which of
three State appraiser classifications (General, Residential or Licensed)
noted in Exhibit A of this Instruction apply and any other significant
USPAP or Rural Development program requirements.

\(c\) The selection of appraisers shall be made on an equal opportunity
basis, whereby the race, color, national origin, sex, religion, age, or
handicap of a prospective appraiser shall not be considered.

§1922.6 [Training needs for Rural Development full-time and Rural
Development part-time State designated appraisers]{.underline}.

\(a\) [Training for Rural Development full-time State designated
appraiser]{.underline}. Rural Development full-time State designated
appraisers are required to obtain the State-certified general status
within 3 years from the date of designation. The core courses selected
by the appraiser and supervisor must be accredited by the State
Appraisal Board and meet the general course guidelines and directions as
set out in Exhibits B and C of this Instruction. Full-time designated
appraisers taking the core educational courses in the 3-year curriculum,
as set out in Exhibit B of this Instruction, are authorized to complete
Rural Development appraisals involving loans or servicing transactions
with no dollar limitation. An Rural Development certificate of training
will be issued to those employees who successfully complete the core
course hours. Verification of the training must be made on Exhibit D of
this Instruction.

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RD Instruction 1922-A

§1922.6 (Con.)

\(b\) [Training for Rural Development part-time State designated
appraiser]{.underline}. The State Director or Rural Development
full-time State designated appraisal staff will determine and establish
the training needs for all Rural Development part-time State designated
appraisers. The training will be sufficient to ensure that the ethics,
competency, departure provisions, jurisdictional exception, and
supplemental standards to Standards 1 and 2 of USPAP and the appropriate
Rural Development appraisal instructions are followed. Rural Development
full-time State designated appraisers should provide in-house/on-the-job
training to Rural Development part-time State designated appraisers in
order to meet USPAP Standards and Rural Development appraisal
instructions. Rural Development employees who perform farm and housing
appraisals under this designation are authorized to develop the loan or
transaction packages and complete the appraisal; however, they may not
approve the loan or transaction.

§1922.7 [Training needs for Rural Development full-time State designated
appraiser/reviewer]{.underline}.

The State Director will establish the training needs for Rural
Development full-time State designated appraiser/reviewer. They should
have at least the minimum level of training as required for Rural
Development full-time appraisal staff as set out in §1922.6(a) of this
Instruction; the 15 credit hours for reviewing appraisals noted in
Category 4 of Exhibit C of this Instruction; and have recent, relevant
and documented appraisal experience which clearly establishes their
qualifications.

§1922.8 [Rural Development real estate appraisals for guaranteed
loans]{.underline}.

General guidelines are noted in Exhibit A of this subpart. For detailed
guidelines, see appropriate Rural Development Instructions relating to
the type of Rural Development guaranteed loan involved.

§1922.9 [Reimbursement of fees and dues for State-certified general
appraisers]{.underline}.

The Agency has made a commitment to ensure that all Rural Development
full-time State designated appraisers and Rural Development full-time
State designated appraiser/reviewers, who have received their
State-certified general status, be reimbursed for State fees and dues
incurred. To receive reimbursement for the initial State application,
testing, and certification fees for the current year or ongoing renewal
fees, the employee must submit and document his/her claims in writing as
follows:

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RD Instruction 1922-A

§1922.9 (Con.)

\(a\) Full name of person claiming reimbursement;

\(b\) Present job series (i.e., GS-1171, GS-301, etc.);

\(c\) A copy of current year\'s State-certified general license;

\(d\) Proof of payment (copy of cancelled check or money order clearly
showing dollar amount and date paid);

\(e\) Complete address where reimbursement check can be mailed; and

\(f\) Send reimbursement requests to the following address:

USDA, Rural Development

Program Development Staff

Ag Box 0772

Washington, DC 20250

§1922.10 [Uniform Standards of Professional Appraisal Practice
(USPAP)]{.underline}.

\(a\) [Rural Development real estate appraisals]{.underline}. All real
estate appraisals associated with Rural Development direct and
guaranteed loan making and servicing transactions will be completed as
described in appropriate Rural Development appraisal instructions and
Standards 1 and 2 of USPAP. The USPAP guidelines include the ethics,
competency, departure provisions, jurisdictional exception, and
supplemental standards to Standards 1 and 2. Each Rural Development
full-time and part-time State designated appraiser will be furnished a
current copy of USPAP each year. Current copies of USPAP can be found in
each Rural Development State Office.

\(b\) [Rural Development real estate appraisal reviews]{.underline}. All
Rural Development real estate appraisal reviews associated with Rural
Development direct and guaranteed loan making and servicing transactions
will be completed as described in the appropriate Rural Development
program review instructions. All technical (desk or field) reviews must
meet Standard 3 of USPAP. The USPAP guidelines include the ethics,
competency, departure provisions, jurisdictional exception, definitions
and supplemental standards to Standard 3.

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RD Instruction 1922-A

§1922.11 [Administrator\'s exception authority]{.underline}.

State Directors may request exception authority to the appointment of an
Rural Development full-time State designated appraiser. Authority shall
be given to those States which can document that appraiser/reviewer
labor requirements do not warrant full-time appraisal staff. An
exception will only be granted to State Directors for part-time State
designated appraisers\
(GS-1165 or GS-475) who will become State-certified general in 3 years,
meet the training requirements of Exhibits B and C of this Instruction,
and handle the review of appraisals. This authority shall not be granted
to those Rural Development part-time State designated appraisers who
will have authority to appraise only real estate under \$100,000. The
exception authority must be in writing. It must include the number and
type of jobs (GS-1165 or GS-475) involved, address or location of
employees affected, and the expected labor documentation or studies
completed. The studies must clearly show the anticipated hours per year
that are necessary to meet the appraisal loan making and/or appraisal
review actions.

§§1922.12 - 1922.50 \[Reserved\]

Attachments: Exhibits A, B, C, and D.

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RD Instruction 1922-A

Exhibit A

## FARMERS HOME ADMINISTRATION REAL ESTATE APPRAISER REQUIREMENTS

[Type of State-Appraiser Classifications]{.underline}

[General]{.underline} [Residential]{.underline} [Licensed]{.underline}

[CONTRACTOR REQUIREMENTS]{.underline}

[FOR DIRECT LOANS]{.underline}

1\. Farmer Programs X

2\. Single Family Housing\* X X X

3\. Multi-Family Housing X

4\. Business/Industry X

5\. Community Programs X

[LENDER APPRAISER REQUIREMENTS]{.underline}

[FOR GUARANTEED LOANS]{.underline}

1\. Farmer Programs\*\* X

2\. Single Family Housing X X X

3\. Business/Industry X

4\. Community Programs X

> [Note \*]{.underline}: Solicitation shall include minimum
> State-appraiser classification.
>
> [Note \*\*]{.underline}: On guaranteed real estate secured loans
> submitted by lenders, the appraisal must be completed by a
> State-certified general appraiser if the loan transaction is greater
> than \$100,000. The loan transaction includes interest through the
> closing date. However, the lender has the option of using either a
> State-certified general appraiser or State-licensed appraiser if the
> loan transaction is \$100,000 or less. For a definition of loan
> transaction related to guaranteed Farmer Programs loan servicing, see
> §1980.113 of RD Instruction 1980-B.

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RD Instruction 1922-A

Exhibit B

## MINIMUM TRAINING CURRICULUM REQUIREMENTS

## 

(ForRural Development full-time State designated appraiser and Rural
Development full-time State designated appraiser/reviewer positions.)

1\. Each Rural Development full-time State designated appraiser or Rural
Development full-time State designated appraiser/reviewer must
successfully complete a minimum of 165 core course hours accredited by
the State Real Estate Appraiser Board, as outlined in Categories 1, 2
and 3 in Exhibit C of this Instruction, in order to receive the Rural
Development certificate of training.

2\. Employees will have 3 years from the date they enter the Rural
Development full-time State designated appraiser position or Rural
Development full-time State designated appraiser/reviewer position to
successfully complete the core course curriculum, obtain Rural
Development certificates of training, and achieve their State-certified
general status. For those employees who have entered the Rural
Development full-time State designated appraiser position on or before
January 7, 1994, the educational requirements must be achieved by
January 1, 1995.

3\. The 15 minimum hours required for reviewing appraisals as cited in
Exhibit C of this Instruction, applies to those employees who are named
Rural Development full-time State designated appraiser/reviewers. The 15
minimum hours are generally accredited by the State Real Estate
Appraiser Board as continuing education.

4\. All courses and accredited hours must have been successfully
completed after January 1980.

5\. Employees who have received their State-general certification status
are required to complete a minimum of 10 course hours accredited by
their State Real Estate Appraiser Board annually. The course topics for
this continuing education requirement are left to the discretion of the
employee and his/her supervisor.

6\. Training requirements may be taken from such approved institutions
as the following:

> a\. Colleges or universities.
>
> b\. Community or junior colleges.
>
> c\. Real estate appraisal or real estate-related organizations.
>
> d\. State or Federal agencies or commissions.
>
> e\. Proprietary schools.
>
> f\. Other providers approved by the State certification licensing
> agency.

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RD Instruction 1922-A

Exhibit C

## REQUIRED CURRICULUM

## 

## 

## 

[Category 1]{.underline}: One hundred twenty-six credit hours of the
following, with a minimum of 40 hours concentration in farm real estate
appraisal related courses.

\(A\) Sales comparison approach

\(B\) Cost approach

\(C\) Income approach

\- Estimation of income and expenses

\- Operating expense ratios

\- Direct capitalization

\- Estimated cash flow

\- Measures of cash flow

\- Discounted cash flow analysis

[Category 2]{.underline}: Uniform Standards of Professional Appraisal
Practices\
(15 credit hours minimum).

[Category 3]{.underline}: Narrative report writing (24 credit hours
minimum).

[Category 4]{.underline}: Reviewing appraisals (15 credit hours minimum
for employees in appraiser/reviewer positions).

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RD Instruction 1922-A

Exhibit D

## RURAL DEVELOPMENT APPRAISAL CERTIFICATION PROGRAM 

## SEMI-ANNUAL REPORT\*

Page No.

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\| State: Allocation: \|

\| Prepared By: Obligated: \|

\| [Date Submitted: Balance:]{.underline} \|

\| Name: Position Title: \|

\| Program Entry Date: \|

\| \|

\| Identify courses by category. \|

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\| Course Titles and Dates \| Accredited \| Tuition \| Travel \|

\| attended by Category \| Hours Completed \| Cost \| Cost \|

\| [\| \| \|]{.underline} \|

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[\| \| \| \| \|]{.underline}

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Chief Appraiser Signature Date

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Appraiser Signature Date

This report certifies that all courses meet State standards of
accreditation in compliance with Financial Institutions Reform, Recovery
and Enforcement Act and Rural Development requirements.

\*Due at the end of the 2nd and 4th quarters of each fiscal year.

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