U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner and Acting Administrator of the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) Jeffrey Clark announced the termination of policies introduced under Biden-era Property Appraisal and Valuation Equity (PAVE) task force.  The termination of the polices aim to improve efficiency, reduce regulatory burden and expand access to homeownership, HUD stated in a press release.

As part of the PAVE task force, members were directed to issue guidance on anti-discrimination obligations, review policies and practices, and issue new policies focused on eliminating bias and advancing equity in home appraisals.

The terminated policies related to Reconsideration of Value and Appraisal Fair Housing Compliance include:

• ML 2024-16, Extension to the Effective Date of Appraisal Review and Reconsideration of Value (ROV) Updates
• ML 2024-07, Appraisal Review and Reconsideration of Value

ML 2021-27, Appraisal Fair Housing Compliance and Updated General Appraiser Requirements

The termination of those specific policies eliminates what HUD said were unnecessary regulatory hurdles imposed on lenders, appraisers, and other program participants.

“By tearing down these onerous hurdles, we’re freeing professionals from a tangle of red tape that drove up costs, inhibited access to homeownership, and discouraged market participation,” Turner said in the release. “Under President Trump’s leadership, the Biden-era’s obsession with DEI (diversity, equity and inclusion) and overregulation is over.”

Established in 2021, the PAVE task force asserted that, in part, appraisals often result in systematic undervaluation of properties in Black and Hispanic neighborhoods.

However, HUD noted that data from the American Enterprise Institute (AEI), a conservative think tank, concluded that other characteristics unrelated to race – including educational attainment, average credit score and family formation – are more likely significant drivers in differences between home values and appraisal outcomes.

“We’re encouraged that HUD and other agencies are beginning to roll back certain PAVE-inspired policies adopted by the Biden administration. These actions were driven by claims of race-based disparities in home values, mortgage denial rates, and appraisal under-valuations,” Tobias Peters and Ed Pinto, co-directors at AEI Housing Center, said. “These claims ignored AEI Housing Center research that found similar disparities in white communities with similar socioeconomic status, thereby invalidating the argument that the disparities were race based.”

HUD stated that current laws, including The Fair Housing Act and Equal Credit Opportunity Act, prohibit discrimination in all housing-related transactions including in the homebuying and lending processes. The Fair Housing Act and Equal Credit Opportunity Act will continue to be enforced.