Now What? On a New Trump Administration

With the election behind us and Republicans poised to control most – if not all – of the legislative process, I felt it important to look at what’s been said regarding how a new Trump administration will handle appraisal-related issues. This is not what I want them to do, but rather a distillation of how various documents and comments can inform expectations.

Regardless of prior distancing, it is reasonable to expect Project 2025 to be reflected in much of the Trump administration’s efforts, so I’ll include it here. I also believe it’s likely that Trump’s approach to the GSEs and FHFA in the first term will be similar, so we can look backwards at how that played out previously. Lastly, we can look at late-first term efforts on housing finance reform as a starting point for second term prerogatives.

On GSEs and FHFA

The most obvious place to start is how we can expect the Trump administration to view the work of the Federal Housing Finance Agency (FHFA) and its ongoing conservatorship of Fannie Mae and Freddie Mac. It was, and will likely be, a clear objective to complete the recapitalization and release of the two GSEs from conservatorship – though this will require some guardrails around GSE activities such as collateral risk management.

The recent expansion of appraisal waiver eligibility likely does not sit well with those poised to take on leadership roles in the next Trump administration, as it underscores creep from the GSEs missions. You could also argue that the GSEs effective capture of the mortgage-related appraisal process falls into that category, though it’s difficult to see an unwinding of the new Uniform Appraisal Dataset and Forms Redesign.

Instead, we could see a return to using fewer waivers and non-appraisal valuation alternatives as a means of shoring up collateral risk in preparation for an exit from conservatorship, and stronger collateral risk management requirements imposed on the GSEs going forward. In sum, this would be a net positive for appraisers working in the mortgage lending space as demand for services would increase. (This does not address, though, the effect on demand caused by rising or falling interest rates; we’ll consider that beyond the scope of this piece.)

Two last small points to consider: In its 2019 Housing Reform Plan, Treasury suggested both making loan-level appraisal and valuation data available to the public, and making that same data available to potential new entrants into the secondary mortgage market. Democratization of GSE held appraisal data has long been a goal among appraisers who have been providing this very data to the GSEs for over a decade, as it could be used to innovate across the appraisal space.

On Bias and Discrimination

We have clear answers on what we can expect from the Trump administration on bias and discrimination, if we take at face value the Project 2025 statement on the matter:

“Immediately end the Biden Administration’s Property Appraisal and Valuation Equity (PAVE) policies and reverse any Biden Administration actions that threaten to undermine the integrity of real estate appraisals.”

Considering the broader pushback to come on diversity, equity, and inclusion efforts likely to occur under a Trump administration, the winding down of PAVE seems almost inevitable. This also opens the door for pushback on related changes, such as the expansion of the Nondiscrimination rule of the Uniform Standards of Professional Appraisal Practice, or the addition of valuation bias education to the Real Property, to the extent that either of these would include content that goes beyond what exists in statute already. Whether and to what extent changes are sought in appraisal standards or appraiser qualification criteria – and how a Trump administration might pursue such changes – is open for interpretation.

On the Consumer Financial Protection Bureau (CFPB)

Project 2025 is clear in its desire to see the CFPB abolished; it’s what would follow that could sow confusion among the housing finance system. Were the CFPB abolished, its consumer protection functions would spread among The Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), Federal Reserve, and National Credit Union Administration (NCUA), and its prior rulemakings pulled down.

This leaves two key questions – how would ongoing administration of the Truth in Lending Act/Real Estate Settlement Procedures Act Integrated Disclosures be managed (as this largely sits with CFPB today), and who would retain authority to exercise the as-yet unused Dodd-Frank Section 1475 authority to break out the disclosure of fees paid to appraisers and appraisal management companies?

Also worth noting here is the more active role that CFPB and its leader, Rohit Chopra, have taken with the Federal Financial Institutions Examination Council (FFIEC) and its oversight of the work of the Appraisal Subcommittee (ASC). While changes in administrations tend to result in political appointees leaving prior to or shortly after a new president’s term begins, the broader tumult around CFPB could affect whether and when Mr. Chopra – and his ardent interest in appraisal issues – departs CFPB.

A last point on the view of the regulatory arena generally. It’s no secret that Trump wishes to reduce the role of bureaucracy in government and, by extension, the lives of average Americans. This means almost any agency whose role and responsibilities are not valued or whose work runs counter to the Trump administration’s priorities could be reduced if not eliminated.

While the appraisal space has some experience with regulatory entities winding down (for example, the Resolution Trust Corporation and the Office of Thrift Supervision), there will be system shocks when and if agencies across all of government are affected, and any that affect the appraisal space will be no different.

On Housing Affordability and Mortgage Costs

There is little to go on from the official party platform of the RNC, but there is reference to cutting regulations that are seen as increasing the cost of homeownership. Whether this encompasses the continued comingling of the appraisal fee and fee paid to AMCs is unknown, as is whether this could signal a willingness to move appraisal fees generally out of the zero-tolerance box so lenders aren’t penalized for redisclosing changes in the cost for an appraisal.

More broadly, brining down mortgage rates will likely be a key focus of the next Trump administration. Its ability to reduce rates – thereby stimulating demand for purchase and refinance mortgage loans – will have a direct impact on the demand for appraisals generally.

On Appraisals Generally

Included in the Project 2025 language about PAVE is language about reversing “any Biden Administration actions that threaten to undermine the integrity of real estate appraisals.” What, precisely, could this cover?

One thought is on the FHFA’s efforts to reduce the usage of certain words or phrases in narrative components of appraisal reports, and the extent to which this could be walked back under a new administration. While intended to identify the use of words or phrases that could be discriminatory under the Fair Housing Act, there is anecdotal evidence and commentary on the real-world impact this enhanced scrutiny can have on the ability of appraisers to accurately report an opinion of value.

There are bigger possibilities, however. If the Trump administration views the use of Collateral Underwriter (CU) and Automated Collateral Evaluation (ACE) scores by lenders to seek revision requests from appraisers as undermining “the integrity of real estate appraisals” or their independence, that practice could be addressed. Zoom out further, and there is the possibility of greater enforcement of Appraiser Independence Requirements (AIR), especially in the communications between appraisers and AMCs. Or, thinking more outside the box, does feeling compelled to accept AMC work at low rates compromise “the integrity of real estate appraisals”?

With little in the way of concrete proposals on appraisal-related issues, the various avenues the Trump administration could go down are both limitless and unknown. However, the very fact that appraisals have been mentioned in Project 2025 shows there is some cognizance and desire to seek changes.

Lastly, on Congress

Though we have a lame-duck session remaining in the current Congress, the likelihood of existing appraisal-related bills being passed and signed into law is low given other priorities (government funding expires on December 20th) and, should Republicans take the House along with the Senate, the wish to hold off on further legislating in a split Congress.

Many of the bills that have floundered in this Congress could return next session: Efforts to expand FFIEC and the ASC’s grantmaking authority to promote entry into the appraisal profession; a central appraisal licensure portal; improved consideration of energy efficiency in appraisals; and a bill to allow for flexibility in completing conservation-related Federal appraisal work. There have also been previous efforts to return licensed appraisers to eligibility for FHA-related work.

Often appraisal-related issues are not the focus of early days in a new Congress, and with the possibility of alignment of the House, Senate, and Presidency there is a good chance larger priorities will consume much of the work in the first 90 to 180 days. The most likely tangible outcome will be an oversight hearing sometime over the summer of 2025.

Final Thoughts

While it’s hard to know in advance whether any administration’s work will be net positive or negative for the appraisal profession, it would be fair to characterize the past four years as ones where appraisers and appraisals were a constant focus – especially through the lens of bias and discrimination. I know from many conversations I’ve had, there is real fatigue out there among appraisers who simply want to do their job as best they know – objective, unbiased, and impartial. If nothing else, the early days of the Trump administration may provide some respite from a tumultuous period for the profession as other priorities take center stage.