Appraisers who have had the opportunity to participate in an appraiser conference recently have probably noticed a recurring theme from Fannie Mae – the importance of supervisory appraisers training the next generation of appraisers. Why is this so important to us? In simple terms, we are a risk management company. Guided by principles of good risk management and our mission defined by our congressional charter, the Fannie Mae Selling Guide states the policy requirements for the loans we acquire. The loan-to-value ratio is an important component of how we define loan eligibility and pricing, so appraisals play a vital role in how we manage risk and how we execute our mission.
When we look ahead to the future state of the appraisal profession, however, there is some cause for concern. Appraisal submissions through the Uniform Collateral Data Portal® over the past decade have increased steadily, but the number of active appraisers has remained relatively the same. In 2021, the Appraisal Foundation conducted a Diversity Survey, which reported that 66% of appraisers are age 55 or older, with 31% over the age of 65. With forthcoming retirements likely, will there be enough new entrants into the profession to meet future needs?
Fannie Mae has long allowed and encouraged the participation of trainees in the appraisal process. More details on trainee participation can be found on page 3 of our December 2021 Appraiser Update newsletter. From the outset, appraiser trainees have already taken at least 78 hours of education to qualify for trainee licensure. Plus, they are actively gaining experience and adding to their skills and knowledge under the supervision of an experienced appraiser. With two sets of eyes on the appraisal report, it is not surprising that appraisals by trainees perform well on measures such as defect rates and CU risk scores. All this begs the question, why are there not more supervisory appraisers?
Appraiser trainees can contribute to their supervisors’ firms in more ways than just providing high-quality reports. We hear in conversation with supervisors that trainees bring new insights and skills such as innovative business practices, technologies, or analytical tools. We continue to encourage properly trained new entrants to strengthen the profession in all these ways.
Fannie Mae recognizes the benefits of a more diverse appraiser workforce. In 2018, Fannie Mae collaborated with the National Urban League to launch the Appraiser Diversity Initiative (ADI). The initiative is designed to attract new entrants to the residential appraisal field and foster diversity by helping them navigate education, training, and experience requirements. The Appraisal Institute and Freddie Mac have since joined forces with us. We are proud to say that the ADI is successfully attracting diverse, aspiring appraisers, awarding them education scholarships, and seeing them launch their careers. Jessica Brown and Marcus Knight, two ADI scholarship winners, represent a new generation of appraisers.
As ADI’s scholarship winners complete their qualifying education classes provided by the Appraisal Institute, we match them with advisors who are experienced real estate appraisers. We encourage them to become more involved in the community of appraisers by attending an appraisal conference, and to gain additional knowledge by attending specialized appraisal courses and hearing from industry leaders in small group settings. This allows these new members of the appraisal profession to gain insights and access to a professional network that adds value as they start their careers. Appraisal firms, large and small, have supported the new appraisers by joining ADI as sponsors and agreeing to supervise at least one ADI scholarship winner. ADI is looking for more veteran appraisers across the country interested in employing these motivated new professionals in their businesses. If you would like to become an ADI sponsor as a supervisory appraiser, please reach out to ADI_team@appraisalinstitute.org or stop by the Fannie Mae booth at the upcoming Valuation Expo in September. We would love to answer your questions and provide more information. You may be able to change a life and strengthen your appraisal business with an introduction to your next appraiser trainee.