The new administration in Washington, D.C., has implemented changes that could affect the appraisal profession, including the Property Appraisal and Valuation Equity (PAVE) initiative. Dallas Kiedrowski, a certified appraiser and owner of Washington-based Olympic Valuation, addressed this matter.

“Yes, I believe the PAVE Interagency Task Force has been eliminated and the websites are down,” Kiedrowski told Valuation Review. “The task force was created to address bias in the appraisal process, a significant concern in the real estate industry.

“However, many appraisers felt unfairly singled out, as they were cast as the primary source of bias and discrimination despite a lack of conclusive evidence,” he added. “With appraisers already operating under strict regulations and professional standards, this initiative added yet another layer of scrutiny, one that most in the profession won’t miss in my opinion.”

Kiedrowski referenced web pages associated with PAVE going dark, barring consumers from access to the page, noting President Donald Trump’s administration has “swiftly” removed references to PAVE and equity-related initiatives from White House and government websites.

This appears related to executive orders which terminates “to the maximum extent allowed by law, all DEI … offices and positions … all ‘equity action plans,’ ‘equity’ actions, initiatives, or programs, ‘equity-related’ grants or contracts; and all DEI or DEIA performance requirements for employees, contractors, or grantees,” he added.

We asked Kiedrowski what other changes might be on the horizon.   

“The appraisal industry's regulatory landscape is highly fragmented and complex, even for those deeply involved,” he answered. “Given this, predicting how an administration change will translate into meaningful policy shifts for the profession remains an open question.

“From an appraisal standpoint, the most significant changes will likely come from the new administration’s push to remove Fannie Mae and Freddie Mac, collectively known as the government-sponsored Enterprises (GSEs), from FHFA conservatorship,” Kiedrowski went on to say. “Without the implicit government backing provided by conservatorship, market forces would likely require stricter oversight and more stringent financial safeguards. This could lead to a rollback of the expanded use of products perceived as increasing collateral risk, such as appraisal waivers (now termed ‘value acceptance’ by the GSEs), hybrid appraisals (formerly ‘bifurcated’), or a tightening of thresholds—potentially limiting these alternatives to refinance transactions and/or shifting the loan-to-value (LTV) from 97 percent LTV back down to 80 percent LTV, as was previously the norm.”

Kiedrowski also said it is too early to determine whether the FHFA will pressure the GSEs to roll back recent changes made under their “commitment to unbiased appraisals.”

These include the designation of “subjective language” as an “unacceptable appraisal practice,” the Appraiser Diversity Initiative (ADI), and the risk flags related to bias introduced in Collateral Underwriter (CU), he also pointed out.

We also wanted to know whether he felt The Appraisal Foundation will be pressured to make selected USPAP revisions in the wake of these administrative changes.

“In July 2024, HUD and The Appraisal Foundation entered into a conciliation agreement, which resolved a HUD-initiated complaint alleging that discriminatory barriers were preventing qualified Black individuals and other people of color from entering the appraisal profession, in violation of the Fair Housing Act. Although HUD did not issue formal findings before the agreement was reached, and the agreement itself does not serve as an admission of wrongdoing by The Appraisal Foundation or imply a final determination by HUD on violations of the Fair Housing Act or any other laws, it remains an enforceable agreement aimed at resolving the concerns raised in the HUD-initiated complaint,” Kiedrowski said. “It is open to speculation at this point if the new administration will enforce this agreement or if The Appraisal Foundation will voluntarily continue with the agreement even if not enforced.

“Following several ASC hearings on bias, which were tied to the PAVE Interagency Task Force, specific anti-bias and anti-discrimination language was added to the Ethics Rule in USPAP,” he added. “One key change was the introduction of a mandatory fair housing course for all appraisers, along with a requirement to complete a four-hour continuing education course on fair housing every two years. If I had to speculate, I would anticipate that this change is unlikely to be rolled back, as it aligns with federal fair housing law.”

Kiedrowski also gave us his opinion in relationship to some of these updates/revisions needing to take place earlier. 

“The Fair Housing Act of 1968 was enacted to prohibit discrimination in housing-related activities, including real estate transactions, lending, and appraisals, based on race, color, religion, sex, national origin, disability, and familial status,” he said. “Since appraisals play a crucial role in real-estate transactions, it stands to reason that ethical standards for appraisers should have explicitly referenced these protections when it was first written in 1986-87.”

 And so, since the PAVE Interagency Task Force was established under the previous administration, Kiedrowski concluded it is unlikely new leadership will pursue policies that do not align with the priorities of the new administration.

Kiedrowski also shared with us some highlights pertaining to an article he wrote on LinkedIn titled "The One-Mile Rule: Prudent Policy or Modern-Day Redlining." While not directly related to PAVE, this piece explored the connection between historic redlining and the GSEs’ modern underwriting policies.

“For whatever reason, there has been little research on how modern appraisal review and underwriting standards influence bias and discrimination, despite the fact that redlining itself can be traced back to the FHA’s 1930s underwriting manual,” Kiedrowski said. “Given this history, I personally think it’s worth examining whether today’s policies unintentionally perpetuate similar patterns of inequity.

“For example, research shows that allegations against individual appraisers are relatively rare in recent history. In contrast, several lenders and banks have settled allegations of redlining within just the past year, highlighting a more widespread concern with discriminatory practices,” he added.