FHA recently published Mortgagee Letter (ML) 21-27, which adds language to FHA Single Family Manual 4000.1 regarding appraisals for FHA-insured transactions. The new language specifies that the existing requirement to comply with applicable laws in the creation and evaluation of an appraisal to be used in an FHA-insured loan transaction includes compliance with the Fair Housing Act and any other federal, state, or local anti-discrimination laws. Specifically, no part of the appraisal analysis or reporting may be based on the race, color, religion, sex, actual or perceived sexual orientation, actual or perceived gender identity, age, actual or perceived marital status, disability, familial status, national origin of either the prospective owners or occupants of the appraised property, present owners or occupants of the appraised property, or the present owners or occupants of the properties in the vicinity of the appraised property, or on any other basis prohibited by federal, state, or local law.

Appraisers must be knowledgeable about these anti-discrimination requirements and must generate appraisals in a competent, independent, impartial, and objective matter, also in conformity with USPAP requirements. In addition, the appraiser may not discriminate in developing any part of the appraisal or value conclusion based on characteristics that are protected by federal, state, or local laws, misrepresent the scope of work performed in the completion of the FHA appraisal or develop or communicate an appraisal report to FHA that is knowingly misleading or fraudulent.