HUD's press release describes the conciliation agreement as historic, resolving a complaint "alleging discriminatory barriers preventing qualified Black people and other persons of color from entering the appraisal profession on the basis of race in violation of the Fair Housing Act."

The Appraisal Foundation's announcement about the settlement emphasized that the investigation process started in December 2021 did not result in any findings.

"We are pleased to have reached this conciliation agreement," recently appointed Appraisal Foundation President Kelly Davids said in the group's press release. "We appreciate HUD's recognition of our proactive efforts to lead the appraisal profession to welcome a new, diverse generation of appraisers and their support of our forthcoming scholarship program to aid new entrants to the field."

HUD's comments focused on the lack of diversity in the appraisal profession and the Foundation's role in that, namely its experience requirement, where a friend or family member who is already a licensed appraiser has to be willing to supervise as the applicant gains on-the-job experience.

"The lack of diversity within the appraiser workforce can contribute to patterns of mis-valuation in communities of color," HUD press release quotes the Interagency Task Force on Property Appraisal and Valuation Equity as commenting. It cites Bureau of Labor Statistics data that states the industry is 94.7% white.

Yet the agreement declares "Respondent denies that the Appraiser Qualification Criteria has caused or resulted in any violation of the Fair Housing Act, but agrees to enter into this Conciliation Agreement to conclude the Investigation."

It has a three-year term, set to expire on July 9, 2027.

"To help eliminate racial and ethnic bias from home appraisals, we must ensure that the industry looks like America," HUD Acting Secretary Adrianne Todman said in the agency's release. 

"Today's historic agreement will help build a class of appraisers based on what they know instead of who they know. This settlement will help bring us one step closer to rooting out discrimination in housing and opening doors to opportunity for all," she added. 

Under the agreement, the Foundation is creating a $1.22 million scholarship fund, which will cover the cost of aspiring appraisers to attend Practical Applications of Real Estate Appraisal programs, an alternative pathway to fulfill the experience requirement.

Details, including eligibility and how to apply, will be shared when the program is formally announced, the Foundation press release said.

The Appraisal Foundation has been in the crosshairs of the head of another member agency of the Federal Financial Institutions Examination Council, Director Rohit Chopra of the Consumer Financial Protection Bureau.

Chopra penned a letter after the PAVE report came out in March.

"These issues are deeply troubling as the Appraisal Foundation is one of the most — if not the most — powerful players in America when it comes to appraisals and plays a controlling role in key issues contributing to appraisal bias," Chopra wrote. "As long as the Appraisal Foundation remains an insular body controlled by a small circle, operating behind closed doors, those issues will continue to go unaddressed."