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The Biden administration announced Thursday a series of steps it’s taking to remove racial and ethnic bias from home appraisals.

The announcement came two years to the day after Biden launched the Interagency Task Force on Property Appraisal and Valuation Equity. The task force released an action plan in March 2022, and Thursday’s announcements are aimed at delivering on that plan.

“For far too long, bias in home valuations has limited the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap,” a White House fact sheet said.

Vice President Kamala Harris has led the administration’s efforts to strip bias from home valuations. 

“Everyone should be able to take full advantage of their aspiration and dream of owning a home,” Harris told reporters on a telephone call.

The administration is proposing a rule that would establish quality-control standards for algorithmic and computational models used to assess home values. The standards would require lenders that use such models to adopt and maintain policies and other safeguards to ensure greater confidence in their appraisals. The proposal is subject to a 60-day public comment period.

Federal agencies also are working to promote industry-wide consistency for people who wish to request reconsideration of home valuations they believe might be inaccurate. The White House said consumers are often unaware they can appeal the estimates. The agencies are drafting proposed guidance for how financial institutions may integrate policies regarding reconsiderations of value, or ROV, into their appraisal process. The guidance also will be subject to a public comment period.

Meanwhile, the Housing and Urban Development Department and Federal Housing Finance Agency are working to develop more consistent ROV processes for the Federal Housing Administration, Fannie Mae and Freddie Mac lenders — who account for about two-thirds of all new mortgages.

The Biden administration also is aiming to increase transparency of updated appraisal data, allowing independent researchers to identify any inconsistencies that might be caused by bias. 

And with the goal of improving diversity in the field, the Biden administration is trying to remove barriers for entry into the appraisal profession by publishing a dashboard that shows which states have requirements more stringent than the federal minimum. The White House is calling on those states to drop requirements it believes are unnecessary, including a college degree. It says there is no evidence a degree produces more ethical or accurate appraisals.

According to the Bureau of Labor Statistics, more than 97% of home appraisers are white.

A 2021 study by Freddie Mac found that homes in minority neighborhoods were much more likely than homes in white neighborhoods to be appraised at a value below the contract sales price. A Fannie Mae analysis, also from 2021, found that white-owned homes were more likely to be valued above algorithm predictions than Black-owned homes. 

And a study by the think tank Demos and the Institute for Assets and Social Policy at Brandeis University concluded that eliminating racial disparities in the amount of wealth families gained from owning a home could close the wealth gap between white and Black households by 16%, and between white and Latino households by 41%.

The extent of the discrimination by appraisers can be massive, in some instances more than halving the value of a property. In Indianapolis, one Black homeowner found the appraised value of her home jumped to $259,000 from $125,000, after she declined to disclose her race on her application and removed all family photos and African American art in the home.

The Associated Press contributed to this report.