September 27, 2006

> MORTGAGEE LETTER 2006-26

TO: ALL APPROVED MORTGAGEES

ALL FHA ROSTER APPRAISERS

SUBJECT: Updates to the FHA Appraiser Roster: Streamlined Appraiser
Examination,

> Roster Renewal Procedures, and Contact Information

Effective October 1, 2006, the Federal Housing Administration (FHA)
Appraiser Roster Examination has been streamlined and the examination
fee eliminated. In addition, the appraiser contact information and
appraiser license or certification roster renewal procedures have been
revised.

To be eligible for placement on the FHA Appraiser Roster an appraiser
must:

a\) pass a Department of Housing and Urban Development examination on
FHA appraisal methods and reporting; b) be a state-licensed or
state-certified appraiser with credentials based on the minimum
licensing/certification criteria issued by the Appraiser Qualifications
Board (AQB) of the Appraisal Foundation; and c) not be listed on the
General Service Administration (GSA) Excluded Parties List System
(EPLS), HUD's Limited Denial of Participation List (LDP), or HUD's
Credit Alert Interactive Voice Response System (CAIVRS).

**[Streamlining The FHA Appraiser Examination]{.underline}**

FHA has streamlined its current examination of 50 questions, which was
administered at testing centers by a national test administrator, to 10
questions which have been integrated into the application form for the
FHA Appraiser Roster and which is available online. This reduction in
the number of questions, as well as the format of the questions,
supercedes the provisions of Handbook 4150.2, Section 1-1, A.

Following FHA's adoption of the revised appraisal reporting forms and
protocol announced in Mortgagee Letters 2005-34 and 2005-48, FHA
reviewed the 200 questions that made up the universe of those randomly
selected for the exam, and determined that many were no longer relevant
given that FHA and conventional appraisal requirements are now virtually
identical. Further, each of the revised appraisal forms adopted by FHA
with ML 2005-34, contain a list of appraiser certifications designed to
increase the appraiser's responsibility and accountability for their
work product, improve the quality of appraisal reports and improve the
accuracy and relevance of the information in the appraisal report.

Thus, FHA believes that the 10 questions now posed, along with the
certifications made, and the existing Licensed and /or Certified Real
Property Appraiser Qualification criteria established by the AQB,
provide sufficient evidence of an appraiser's knowledge to competently
and professionally appraise properties that will be the security for
mortgages insured by FHA.

The new FHA Appraisal Examination and instructions can be found on page
three of the revised form HUD-92563, "Application for Fee or Roster
Personnel Designation." A copy of this revised form will be available
online at [http://www.hudclips.org](http://www.hudclips.org/).

Previously issued guidance found in Mortgagee Letter 2003-09 regarding
the services of a National Test Administrator/Provider for the FHA
appraisal examination (identified as "Prometric" in Mortgagee Letter
2003-09 and as "a national provider" in Handbook 4150.2) is rescinded.
The updated examination will be based upon the materials listed in
paragraph 19 (e) of form HUD-92563, which states:

**For appraisers**, I certify that I will comply with HUD Handbook
4150.2, "Valuation Analysis for Home Mortgage Insurance" (and any
updates to the Handbook, Mortgagee Letters) and all other instructions
and standards, in performing all appraisals on properties that will be
security for HUD/FHA insured mortgages.

**[Procedure to Obtain Placement on the FHA Appraiser
Roster]{.underline}**

The applicant must submit the following information via facsimile
202-401-0416 or via regular mail to:

Department of Housing and Urban Development

Office of Single Family Housing

Attn: Home Valuation Policy Division

451 7^th^ Street, SW, Suite 9270

Washington, DC 20410

Telephone Number: 202-708-2121 extension 2185

-   An original of the completed form [HUD-92563]{.underline},
    "Application for Fee or Roster Personnel Designation"; and

-   Photocopy of a valid real estate appraisal license or certification
    with credentials based on the minimum licensing/certification
    criteria issued by the AQB for each state in which the applicant
    intends to perform appraisals.

##### 

##### 

##### [Update in License or Certification Roster Renewal Procedures]{.underline}

FHA Roster Appraisers seeking retention on the FHA Appraiser Roster
should perform the following steps to ensure retention at time of
license or certification renewal:

1.  Upon receipt of state license or certification renewal, appraisers
    should verify

> that FHA reflects the updated license or certification information
> online at HUD's website
> <https://entp.hud.gov/idapp/html/apprlook.cfm>.

2.  If the appraiser\'s certification/license renewal number or
    expiration date are

> updated online at HUD's website, it is **not necessary** for the
> appraiser to submit a photocopy of the valid State appraiser\'s
> license or certification renewal information to HUD.

3.  If the certification/license renewal number or expiration date
    differs online at

> HUD's website, the appraiser must submit a photocopy of the current
> license or certification with credentials based on the minimum
> criteria issued by the AQB to HUD via facsimile at 202-401-0416, or
> regular mail to the above listed address.

##### [Updating the FHA Appraiser Contact Information]{.underline} 

FHA Roster Appraisers are responsible for ensuring that the contact
information contained in the FHA Appraiser Roster is accurate and up to
date. The Appraiser Roster screen on FHA Connection allows a FHA Roster
Appraiser to update or correct their contact information, which
includes: business name, address, telephone numbers, facsimile, and
e-mail address. In order to facilitate communication with appraisers on
the

FHA Appraiser Roster, HUD strongly urges all appraisers currently on the
Roster to include a current e-mail address when updating their contact
information on the FHA Connection. Appraisers should perform the
following steps to update their contact information.

1.  The appraiser has to obtain an FHA Connection user ID, which is
    available online at HUD's website <https://entp.hud.gov/clas>

2.  Under the subheading, Getting Started, click on "Registering a New
    User"

3.  Follow the instructions under the Type of User subheading,
    "FHA-approved Appraiser participating in HUD's Appraiser Review"

##### Information Collection Requirements

The information collection requirements contained in this document have
been approved by the Office of Management and Budget (OMB) under the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB
control number

2502-0538. In accordance with the Paperwork Reduction Act, HUD may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless the collection displays a currently
valid OMB control number.

If you have any questions concerning this Mortgagee Letter, please
contact the FHA Resource Center at 1-800-CALL-FHA or 1-800-225-5342.

Sincerely,

Brian D. Montgomery

Assistant Secretary for Housing-

Federal Housing Commissioner

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