In the early 1980's, the crisis in the savings and loan industry highlighted the need to improve appraisal practices throughout the United States. The difficulties and losses experienced by many lending institutions illustrated the importance of ensuring that appraisals are based upon established, recognized standards, free from outside pressures.

In 1986, nine leading professional appraisal organizations in the United States and Canada formed the Ad Hoc Committee on the Uniform Standards of Professional Appraisal Practice. These sponsoring organizations were:

• American Society of Appraisers
• American Society of Farm Managers & Rural Appraisers
• Appraisal Institute (Formed in 1991 by the merger of American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers)
• International Association of Assessing Officers
• International Right of Way Association
• Massachusetts Board of Real Estate Appraisers
• National Association of Independent Fee Appraisers
• National Association of Master Appraisers

Agreeing upon a generally accepted set of standards, the committee members adopted those standards and thereafter established The Appraisal Foundation in 1987 to implement the Uniform Standards of Professional Appraisal Practice. The Appraisal Foundation, a not-for-profit educational organization dedicated to the advancement of professional valuation, is headquartered in Washington, DC. The Foundation is directed by a Board of Trustees. The Board of Trustees appoints members to and provides financial support for the Appraiser Qualifications Board and the Appraisal Standards Board.

In 1989, Congress adopted the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). FIRREA requires that real estate appraisals used in conjunction with federally-related transactions be performed in accordance with USPAP. With the passage of FIRREA, Congress also gave the two Foundation Boards considerable responsibilities.

Appraiser Qualifications Board (AQB) - The AQB establishes the qualification criteria for state licensing, certification and recertification of appraisers. FIRREA mandates that all state certified appraisers must meet the minimum education, experience and examination requirements promulgated by the AQB. The AQB has also developed voluntary criteria for personal property appraisers.

Appraisal Standards Board (ASB) - The ASB sets forth the rules for developing an appraisal and reporting its results. In addition, it promotes the use, understanding and enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

The Uniform Standards of Professional Appraisal Practice (USPAP) was adopted by the Appraisal Standards Board of the Foundation on January 30, 1989 and is recognized throughout the United States as the generally accepted standards of professional appraisal practice. USPAP contains standards for all types of appraisal services including real property, personal property, business and mass appraisal. The purpose of USPAP is to promote and maintain a high level of public trust in appraisal practice by establishing requirements for appraisers.

USPAP is updated on a periodic basis. The current version is 2006, which became effective July 1, 2006 and expires on December 31, 2007. Although the ASB writes, amends and interprets USPAP, they do not enforce USPAP. Through FIRREA, the Federal government has mandated that the states enforce real property appraiser’s compliance to USPAP.

USPAP compliance is also required by professional appraisal associations, client groups and by dozens of federal, state and local agencies. In addition, many users of appraisal services (such as lenders, mortgage companies, etc) have adopted USPAP and require employee or contract appraiser compliance to USPAP. USPAP is growing in acceptance throughout the world. Many professional associations in North America, South America, Europe and Asia have accepted USPAP as the standard of practice for their membership.

In order to bring New Hampshire into compliance with Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 The State of New Hampshire established the New Hampshire Real Estate Appraiser Board on April 27, 1990 (RSA 310:B). A link to the text of FIRREA appears on our Useful Links page.