Houses are appraised by state-licensed or state-certified real estate appraisers — independent professionals credentialed by their state’s appraisal board to issue a formal opinion of market value. When you’re buying or refinancing, your lender orders the appraisal through an independent intermediary and assigns it to a credentialed appraiser you don’t choose. When you need a valuation for a private reason, such as estate planning, divorce, a tax appeal, or setting a listing price, you can hire an appraiser directly.
The Two Credential Levels That Cover Homes
Every appraiser who works on a federally related mortgage must hold a state credential that meets national minimums set by the Appraiser Qualifications Board.1The Appraisal Foundation. Real Property Appraiser Qualification Criteria For residential work, two credentials matter.
A Licensed Residential Appraiser can appraise non-complex one-to-four-unit properties with a transaction value up to $1,000,000. Candidates complete 150 hours of qualifying education and 1,000 hours of supervised experience over at least six months, then pass a national exam.
A Certified Residential Appraiser can appraise residential properties of any complexity or value. This credential requires 200 hours of education, 1,500 hours of supervised experience over at least twelve months, and an associate degree or equivalent college coursework.
The certified designation carries more weight because it removes the value and complexity caps. On a higher-value home, the lender will assign a certified appraiser rather than a licensed one. Both credentials require continuing education to stay active, and both are enforced by a state appraisal board that can fine, suspend, or revoke them for violating professional standards.
Whoever shows up at your house should follow the Uniform Standards of Professional Appraisal Practice (USPAP), the practice rules all appraisers must apply on federally related work.2eCFR. 12 CFR Part 225 Subpart G – Appraisal Standards for Federally Related Transactions
How a Mortgage Appraisal Gets Ordered
When you apply for a mortgage or refinance, the lender orders the appraisal. The property is collateral for the loan, so the lender needs an independent opinion that it’s worth enough to back what you’re borrowing. Federal rules bar anyone with a financial interest in the loan from coercing, bribing, or otherwise pressuring the appraiser to hit a target number.3eCFR. 12 CFR 1026.42 – Valuation Independence
To enforce that independence, lenders typically hire an Appraisal Management Company (AMC) as a go-between. The AMC keeps a panel of credentialed appraisers and assigns the job based on location and qualifications. Neither you nor your loan officer picks the individual appraiser.
Even though the lender orders the appraisal and remains the appraiser’s client, you pay for it. The fee shows up on your loan estimate and closing disclosure as a line item. You’re entitled to receive a copy of the completed report at least three business days before closing.
When an Appraisal Isn’t Required
Federal banking regulations require a licensed or certified appraisal for most real estate transactions through a federally regulated lender, but residential transactions valued at $400,000 or less are exempt from the full-appraisal requirement.4eCFR. 12 CFR 34.43 – Appraisals Required; Transactions Requiring a State Certified or Licensed Appraiser For those smaller deals the lender may use an internal evaluation instead, though many still order appraisals as a matter of policy.
Fannie Mae and Freddie Mac also offer appraisal waivers — marketed as “Value Acceptance” — for loans that clear their automated underwriting. The waiver is available on one-unit properties, including condos, used as a primary residence or second home when the price or estimated value is under $1,000,000. Two-to-four-unit properties, co-ops, manufactured homes, and renovation loans aren’t eligible.5Fannie Mae. Value Acceptance
FHA and VA loans generally still require a full appraisal regardless of loan amount.
Not every appraisal is a full walkthrough. Depending on the loan and property, three formats are in use today:
- Traditional appraisal. The appraiser inspects the interior and exterior, photographs the home, and develops a value opinion from comparable recent sales. This is the standard for most purchases and higher-value refinances.
- Desktop appraisal. The appraiser works entirely from public records, MLS data, and other sources without visiting. Fannie Mae allows this for one-unit principal residences on purchase transactions with a loan-to-value ratio of 90% or less, when the automated underwriting system offers it.6Fannie Mae. Desktop Appraisals
- Hybrid appraisal. A trained third-party data collector visits the property and records its physical characteristics, then sends the data to a licensed appraiser who develops the value opinion remotely.7Fannie Mae. Hybrid Appraisals
Your lender’s automated underwriting system flags which formats are acceptable for your specific loan.
What It Costs and How Long It Lasts
A standard single-family appraisal typically runs between $300 and $600. Fees climb with region, property size, complexity, rural access, and rush orders. The fee appears on your closing disclosure whether or not the loan ultimately closes.
Reports have a shelf life. For conventional loans sold to Freddie Mac, the appraisal must be dated no more than 12 months before the loan’s note date.8Freddie Mac. Section 5604.3 FHA appraisals expire in 120 days, with a possible 30-day extension under certain conditions. If yours expires before closing, the lender orders a new one and you pay again.
Hiring an Appraiser Yourself
You don’t need a mortgage to hire one. Homeowners commission private appraisals to set a listing price, challenge a property tax assessment, or understand their equity for financial planning. In a private engagement, you choose the appraiser directly, with no AMC in the middle, and you are the client.
Legal matters are the other common trigger. Divorce cases often need a value to divide property between spouses. Estate executors and trustees hire appraisers to establish a home’s value on the date of death for federal estate tax reporting. Attorneys handling property disputes, partition actions, or eminent domain also rely on formal appraisal reports that can hold up in court.
For any private or legal appraisal, look for a certified residential appraiser with experience in your property type and local market. Confirm the credential is active with your state’s appraisal board, and confirm the appraiser works under USPAP — the same standards governing mortgage appraisals.
One boundary worth knowing: a Broker Price Opinion from a real estate agent, based on comparable sales, is not an appraisal. It can help you think about a listing price, but it doesn’t carry the legal weight of a formal appraisal and can’t substitute for one in a mortgage transaction or a court filing.
When the Appraisal Comes In Low
If the appraised value falls below the contract price, the lender won’t fund the full loan amount. The gap has to be covered by someone.
Your first step is a Reconsideration of Value (ROV). In 2024, the Federal Housing Finance Agency directed Fannie Mae and Freddie Mac to set standardized ROV policies so lenders give borrowers a clear process for challenging an appraisal.9Federal Housing Finance Agency. FHFA Announces Enterprise Reconsideration of Value Policies Lenders must disclose how to request an ROV and set expectations for how the appraiser will respond.10Fannie Mae. Appraisal Quality Matters
To support an ROV, gather evidence that the appraisal missed something: comparable sales the appraiser overlooked, incorrect square footage or feature descriptions, or recent improvements left out. The appraiser reviews the new information and decides whether to adjust. An ROV is not a guarantee of a higher number — the appraiser may stand by the original opinion.
If the ROV doesn’t close the gap, your remaining options are renegotiating the price with the seller, bringing extra cash to closing, or walking away if your contract has an appraisal contingency.
Filing a Complaint About an Appraiser
If you believe an appraiser made serious errors, violated professional standards, or discriminated, your state’s appraiser regulatory board is the primary enforcement body. It investigates complaints and can discipline the appraiser directly.
For appraisal bias or discrimination based on race, national origin, or other protected characteristics, you can also file with HUD’s Fair Housing and Equal Opportunity office. If a lender used an improper appraisal as part of discriminatory lending, the Consumer Financial Protection Bureau accepts complaints as well. The Appraisal Subcommittee’s national hotline at refermyappraisalcomplaint.asc.gov can route your complaint to the right agency if you’re not sure where to start.11Appraisal Subcommittee. Appraisal Complaint National Hotline