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Understanding USPAP

An Overview of the Uniform Standards
of Professional Appraisal Practice

To ensure consistency, accuracy, and ethical practice, all appraisers, from Trainees to Certified General Appraisers, should follow the Uniform Standards of Professional Appraisal Practice. This comprehensive book is the foundation of the profession, providing definitions, rules, and standards to provide quality control on every assignment.

Learn about the history of USPAP, what’s in it, and how it affects appraisal professionals. Whether you’re a real estate agent, you want to become an appraiser, or you’re already an experienced appraiser looking to refresh your USPAP knowledge, here’s everything you need to know.

The Uniform Standards of Professional Appraisal Practice, also known as USPAP, establishes the generally recognized ethical and performance standards for appraisers in the United States.

USPAP lays out a minimum set of quality standards for developing and reporting an appraisal of real property, personal property, or business property. It is intended to promote public trust in the appraisal profession.

All state-licensed and state-certified appraisers are required to comply with these standards in federally related real estate transactions.

Under USPAP, appraisers are required to be independent, impartial, objective, and competent. They must understand and employ the methods necessary to form a credible appraisal. Real estate appraisers must follow all laws applicable to the appraisal of real property, including the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA). Furthermore, they may not disclose confidential information.

Adopted in 1989, the Uniform Standards of Professional Appraisal Practice (USPAP) serves as the industry standard for ethics and performance for the appraisal profession in the United States. The Appraisal Standards Board (ASB) of The Appraisal Foundation (TAF) writes, updates, and publishes USPAP and provides standards for the main types of appraisal services: real property (both residential and non-residential), personal property, business (intangible) property, mass appraisal, and appraisal review.

It is essential to note that USPAP does not contain guidelines; instead, USPAP establishes rules and standards for appraisers. Clients and users of appraisal services, such as Fannie Mae and Freddie Mac, establish guidelines for appraisals prepared for certain intended uses. When USPAP compliance is required by law, regulation, or agreement with a client, an appraiser may not deviate from USPAP rules and standards.

Prior to the mid-1980s, the appraisal profession was largely unregulated. Only a small number of states had licensing programs for appraisers, and there were no standards for ethical conduct and competent performance by appraisers.

In 1986, several professional appraisal organizations created an ad hoc committee to establish uniform standards for the profession. The following year, eight U.S.-based appraisal organizations founded The Appraisal Foundation and began drafting the Uniform Standards of Professional Appraisal Practice to create and maintain high levels of public trust in the appraisal profession.

The Appraisal Standards Board of the Foundation adopted these standards in 1989, and the federal government played a significant role in establishing the Uniform Standards of Professional Appraisal Practice as the trusted standards of practice.

Initially, Congress contributed to USPAP’s acceptance by identifying it as the generally recognized standards of practice in the appraisal profession in two key acts. First, Congress recognized the Uniform Standards of Professional Appraisal Practice in Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which authorized federal financial institution regulatory agencies to reference the Uniform Standards of Professional Appraisal Practice in their regulations.

Later, they referenced USPAP again in the Uniform Relocation Assistance and Real Property Acquisition Policies Act.

The Office of Management and Budget (OMB) and the Internal Revenue Service (IRS) have also recognized USPAP. Many states have followed suit, referencing USPAP in their state laws and regulations pertaining to appraiser conduct, while private industry groups Fannie Mae, Freddie Mac, Farmer Mac, the Farm Credit Administration, and Worldwide ERC have acknowledged it and integrated it in their policies.

To understand the Uniform Standards of Professional Appraisal Practice, it’s important to see how its various parts complement the primary goal of promoting and preserving public trust. The Appraisal Standards Board has outlined that the concept of trust obligates the appraiser to act in the public’s interest, which means the appraiser must act with: 

  • Independence
  • Impartiality
  • Objectivity
  • Competency
  • Integrity

To support this endeavor, USPAP governs both the ethical side and the performance side of appraisal practice.  

Now that we know what it is and how it came to be, let’s look at what’s inside USPAP and what you can expect.

USPAP is broken down into:

  • Preamble
  • Definitions
  • Rules
  • Standards 1 through 10
  • Comments

The PREAMBLE describes the overall purpose and structure of the Uniform Standards of Professional Appraisal Practice and how to apply it within the profession.

The DEFINITIONS include the terms that have distinct meanings within the appraisal profession in USPAP, often either different from or not included in a standard dictionary. 

There are five RULES in USPAP which cover general practice requirements, including:

  • The ETHICS RULE describes the general ethical requirements for appraisers related to integrity, impartiality, maintaining objectivity, using independent judgement, and conducting oneself in an ethical manner on every assignment.
  • The COMPETENCY RULE defines competency within the context of an appraisal assignment and establishes that an appraiser must meet that threshold to complete the assignment.
  • The RECORD KEEPING RULE defines what must be included in a workfile for an appraisal or appraisal review assignment, including the data, information, and documents that support the appraiser’s findings and provide proof of USPAP compliance.
  • The SCOPE of WORK RULE stipulates that the appraiser must determine the parameters of the assignment, including problem identification, determination of an appropriate scope of work, and disclosure of the scope of work that was performed within the appraisal report.
  • The JURISDICTIONAL EXCEPTION RULE recognizes that laws or regulations take precedence over complying with the Uniform Standards of Professional Appraisal Practice in certain situations.

There are 10 STANDARDS which include separate rules and establish requirements related to specific disciplines and types of assignments. They are:

Standard 1 — Real Property Appraisal, Development
Standard 2 — Real Property Appraisal, Reporting
Standard 3 — Appraisal Review, Development
Standard 4 — Appraisal Review, Reporting
Standard 5 — Mass Appraisal Development
Standard 6 — Mass Appraisal Reporting
Standard 7 — Personal Property Appraisal Development
Standard 8 — Personal Property Appraisal Reporting
Standard 9 — Business Appraisal Development
Standard 10 — Business Appraisal Reporting

Comments are added throughout the text and are a key part of the Uniform Standards of Professional Appraisal Practice as they have the same weight as the component they address. Functioning as extensions of the DEFINITIONS, RULES, and Standards Rules, and they provide interpretation, establish context, and define the conditions for application. 

The Appraisal Foundation also publishes a USPAP companion publication, the USPAP Guidance and Reference Manual (USPAP GRM), intended to provide guidance only and not a part of USPAP. The publication contains Advisory Opinions (AOs), Frequently Asked Questions (FAQs) and a Reference Index.

1. Advisory Opinions (AOs) are a form of guidance illustrating the applicability of USPAP in specific situations.

2. Frequently Asked Questions (FAQs) respond to questions raised by appraisers and others. The FAQs also illustrate the applicability of USPAP in specific situations, but in a more abbreviated format than the Advisory Opinions

3. The Reference Index is a guide to USPAP related topics, AOs, and FAQs.

The material in the USPAP GRM is not intended to be enforceable. Advisory Opinions, FAQs, and the Reference Index do not establish new standards or interpret existing standards.

USPAP training is part of the initial coursework (or qualifying education) required to become a trainee appraiser.

As part of their qualifying education, all aspiring appraisers must take a 15-hour USPAP course and pass a written examination based on the material in the Uniform Standards of Professional Appraisal Practice publication.

After becoming a licensed or certified appraiser, you must take a 7-hour USPAP course once every two years. This ongoing USPAP training is part of the continuing education coursework required to maintain your appraisal license.  

McKissock is the exclusive provider of The Appraisal Foundation’s national online, self-paced courses for both the 15-hour qualifying and 7-hour continuing education courses. Only AQB-Certified instructors may teach the 7-hour and 15-hour USPAP classes. 

Here are answers to some of our more frequently asked questions about the Uniform Standards of Professional Appraisal Practice.  

Do appraisers have to follow USPAP standards?

Appraisals prepared for certain transactions, including mortgage loans made by federally-insured banks and mortgages that are government insured or guaranteed, must be prepared in compliance with USPAP standards. Professional organizations like the American Society of Appraisers and the National Association of Appraisers require members to comply, as well. Failing to follow USPAP can lead to discipline by your state’s appraisal board or even the loss of your license. 

How is USPAP enforced?

USPAP is not enforced by The Appraisal Foundation. Per FIRREA, the federal government mandates that individual states enforce real estate appraiser compliance with USPAP. Responsibility for processing complaints and taking disciplinary action against an appraiser falls to the appraisal regulatory agency in the state where the appraiser is licensed or certified. 

How do I take USPAP courses?

Initially, you need to complete the 15-hour USPAP qualifying education course in your state to become a trainee. Once licensed or certified, you are required to take the 7-hour USPAP Update every two years. With McKissock Learning, you have the option to complete your USPAP education via an in-person class, a livestream course, or a self-paced online course. 

Explore USPAP classes. 

Are there prerequisites to taking USPAP classes?

If you are working on your qualifying education to become a trainee appraiser, you’ll need to complete two mandatory courses, Basic Appraisal Principles (30 hours) and Basic Appraisal Procedures (30 hours), before taking the 15-hour USPAP course.  
Learn more about qualifying education for appraisers

Does the Uniform Standards of Professional Appraisal Practice change every two years?

Not necessarily. The ASB only releases a new edition of standards when they determine it’s necessary. However, even if the Uniform Standards of Professional Appraisal Practice hasn’t changed in the two years between taking the 7-hour Update course, it is still required, and there will be new information in the course. Instructors will discuss relevant and emerging issues in the profession and provide more information about critical topics.  

How do I get a USPAP book?

When you take the online or livestream USPAP courses with McKissock, you’ll receive an interactive, digital version of USPAP along with all the supporting materials necessary for the course. If you take an in-person course, you’ll receive a hard copy of USPAP and the supporting manuals. 
If you’re not required to take the course, anyone can purchase a print or electronic copy of the publication from The Appraisal Foundation.