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No More FHA Test

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Doug Smith SRA

Thread Starter
Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Montana
01/08/2008. HUD has scrapped the requirement for a test to become FHA certified.

http://regulations.justia.com/view/99342/

This final rule also eliminates the requirement for applicants to
pass a HUD test on FHA appraisal methods and reporting. FHA has
undertaken a series of initiatives to align its practices with those of
the conventional lending industry, including streamlining and updating
its appraisal reporting procedures and policies. By adopting and
requiring the use of updated appraisal reporting forms and relaxing its
repair and inspection requirements for existing properties, FHA has
ensured that an appraisal of a property that is to be the security for
FHA-insured financing is not materially different from an appraisal of
the same property performed for conventional financing. As a result,
the knowledge and skills needed to perform an FHA appraisal do not
differ from those needed to perform an appraisal for a conventional
mortgage. Therefore, HUD has determined that a separate test on FHA-
specific appraisal methods and reporting is no longer necessary.
Furthermore, HUD has concluded that passage of the State-
administered examination required under the AQB qualification criteria
is an acceptable indicator of an applicant's competence in and
knowledge of real estate appraisal methodology. Under the current AQB
criteria, applicants must pass the AQB-endorsed uniform examination, or
its equivalent, for the level of credentials they are seeking.
Examinations for all credentials are comprehensive and cover 15 topics,
including economic, legal, and ethical principles and various
approaches to property valuation. Practice questions test applicants'
ability to apply the knowledge and competency they gained through
required coursework and experience to appraise representative
properties based on available data. In light of the rigorous and
comprehensive nature of the AQB-required examination, HUD has
determined that the FHA test provides no additional assurance that
appraisers listed on the FHA Appraiser Roster are able to provide
accurate appraisals of properties that are to be the security for FHA-
insured mortgages.
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
How about that. Just finished reading the pdf. No more 'gimme the answers' threads. There may be hope for the future after all.
 

Kevin Mc

Elite Member
Joined
Jun 7, 2004
Professional Status
Certified Residential Appraiser
State
New York
there was a test?

I remember taking a fairly significant test years ago but I was under the impression of late that 10 questions/open book was all that was required to be FHA certified. That doesn't constitute a test in my book. No VC sheets, no testing requirements and sub-prime LOs wallowing in FHA loans these days.
Nice to see the feds have their finger on the pulse.
 

Suz-E

Senior Member
Joined
Apr 17, 2006
Professional Status
Certified Residential Appraiser
State
Illinois
No, it doesn't constitute a test, but it does at least (if they're not cheating by asking for the answersm2: ) make one read the manual. Now we're going to have appraisers just signing up for the extra buck and not even reading the procedures.


Is HUD digging their own grave along with all the others? :shrug:
 

The Matrix

Senior Member
Joined
Apr 28, 2003
Professional Status
Certified General Appraiser
State
Colorado
I guess HUD is trying to get their rate over the current 13% delinquency rate.


In light of current economic conditions... and HUD's increasing delinquency stats...What the heck is going on? This is picture of Assistant Secretary for Housing--Federal Housing Commissioner... Brian Montgomery...His name is on the document linked above. Any comments or observations regarding the man in the picture?

How will the elimination of appraiser testing improve the quality of appraisals HUD is currently using to insure their loans? I would like to know why the delinquency rate on FHA loans is higher than any other lender/insurer.... and more than double VA's rotational panel system.

Here's a link to the current stats on FHA loan delinquencies. Look under the column labeled "Total Delinquent"

http://appraisersforum.com/redirect...iew%20Reports%20-%20November07%20-%20Free.pdf
 

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TC

Elite Member
Gold Supporting Member
Joined
Jan 31, 2002
Professional Status
Certified Residential Appraiser
State
Pennsylvania
... Brian Montgomery...His name is on the document linked above. Any comments or observations regarding the man in the picture?


Yeah, he's eating pretty well.


TC
 

Kevin Darland

Freshman Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Kentucky
I had read something in the past that indicated that HUD was going to do away with the testing. Oh well, at least my HUD REO work will pick up...:)
 

Bama Bayou

Senior Member
Joined
Oct 19, 2006
Professional Status
Certified General Appraiser
State
Alabama
The difference between FHA and conventional financing is that FHA is fully backed by the taxpayers. They should be using the most qualified appraisers available. It could be as simple as this:

1. Appraiser must be certified. A license should not make the cut.
2. Appraiser must have been certified for at least three years.
3. Appraiser must not have been sanctioned by their state board during the
last three years.
4. For reverse mortgages the appraiser must have been certified for
at least five years with no sanctions.

Getting rid of the test is meaningless. It really wasn't a test anyway since the answers have been posted all over the web. Maybe it was a test about cut & paste ability.
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
A licensed or certified appraiser is qualified to appraise for HUD/FHA by virtue of the state examinations. It is the appraisers job to know the scope of work for each intended use and intended user.

Given the voluminous handbooks, mortgagee letters, and documents put out by HUD for FHA I don't see how a 10 question open book quiz or even a 200 question proctored examination would make much difference. Most of the biggies FHA is concerned about should be observed and addressed by even the greenest appraiser and the pickyuni stuff in the manuals doesn't really amount to much anyway.

Good riddance to the test. It's the lenders job to make sure the property qualifies. It's the appraiser's job to adequately describe the property.
 
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