Congress quietly expands trainee appraisers for FHA mortgages, risking quality collapse
S. 1635 — Appraisal Industry Improvement Act · Filed by Kevin Cramer (R-ND) · 1 cosponsor · Introduced May 7, 2025 · Referred to committee
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What it does
This bill allows state-licensed appraisers (not just federally certified ones) to conduct appraisals for FHA-insured mortgages, provided they meet competency standards and complete FHA-specific training. It also creates a new category of 'state credentialed trainee appraisers' who can assist licensed appraisers, establishes a modest annual registry fee ($20) for trainees, allows the Appraisal Subcommittee to adjust fees if they cause harm, and authorizes grants to state agencies for appraiser workforce training.
Why we flagged it
The bill's core mechanism is to relax federal appraiser certification requirements by allowing state-licensed appraisers and trainee appraisers to perform FHA appraisals, framed as workforce development but functionally a deregulatory move that trades federal oversight for state-level credentialing.
- Section 6 adds Department of Veterans Affairs, Rural Housing Service, and HUD to the Appraisal Subcommittee—substantively unrelated to appraiser licensing standards or trainee programs; appears to be a governance restructuring rider.
What the text implies
- Trainee appraisers may conduct appraisals with minimal independent oversight, creating moral hazard: a trainee working under a licensed appraiser's supervision may pressure valuations upward to close loans, with the licensed appraiser bearing nominal liability.
- State credentialing standards for trainee appraisers are not federally mandated—states may set minimal requirements, creating a race-to-the-bottom in appraiser quality across FHA-insured mortgages.
- The bill permits the Appraisal Subcommittee to lower registry fees if they 'result in adverse consequences,' but does not define 'adverse consequences'—this grants discretionary fee-waiver authority that could be captured by industry lobbying.
- Expansion of the appraiser workforce may depress appraisal fees, reducing barriers to entry but also reducing incentives for rigorous training and potentially attracting lower-quality practitioners to the field.
- FHA mortgage insurance fund exposure increases if trainee-assisted appraisals inflate property values; borrowers and taxpayers bear the risk if defaults spike.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
The bill may lower barriers to homeownership by expanding the appraiser workforce and potentially reducing appraisal costs for FHA borrowers, but it also permits less-experienced trainee appraisers to conduct appraisals under supervision, which could reduce quality control and increase risk of inflated valuations that harm borrowers and the FHA insurance fund.
Who stands to gain
- state appraiser licensing agencies (grant recipients)
- appraisal management companies (expanded workforce reduces labor costs)
- mortgage lenders (lower appraisal costs, faster closings)
- trainee appraisers (new career pathway, lower barriers to entry)
Named in the bill
Federal Housing Administration (FHA), Appraisal Subcommittee, Appraiser Qualification Board, Appraisal Foundation, Department of Housing and Urban Development (HUD), Department of Veterans Affairs, Rural Housing Service, State appraiser certifying and licensing agencies, National Housing Act, Financial Institutions Reform, Recovery, and Enforcement Act of 1989
Where it stands
1 cosponsor: 1 Democrats.
- May 7, 2025 — Introduced · Congress.gov: “Introduced in Senate”
- May 7, 2025 — Referred to Senate Committee on Banking, Housing, and Urban Affairs · Congress.gov: “Read twice and referred to the Committee on Banking, Housing, and Urban Affairs”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
2 lobbying clients named this bill on 3 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $1,260,000 in lobbying spend. A filing names 4 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 41% of bills with at least one filing.
Kevin Cramer, the sponsor, reported $204,312 in PAC receipts in the 2026 cycle.
- Mortgage Bankers Association — $1,220,000 on 1 filing
- Real Estate Valuation Advocacy Association (revaa) — $40,000 on 2 filings
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (7,461 characters) on Aug 19, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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