APPRAISER / APPRAISALS NORTH DAKOTA BANKERS ASSOCIATION 65 TH LEGISLATIVE SESSION

APPRAISER / APPRAISALS NORTH DAKOTA BANKERS ASSOCIATION 65 TH LEGISLATIVE SESSION

PLAN OF ACTION ISSUE Current law requires state standards to be at least as stringent set by the Appraisal Qualifications Board. Given changes by AQB last May, should there be a statute that provides state standards may be no more stringent than AQB standards? PROPOSED SOLUTION It s likely that NDBA would want to support new legislation to match the updated AQB standards. Matching the AQB minimum standards will relax the educational requirements for new appraisers to become licensed. North Dakota currently has a shortage of appraisers and Governor Doug Burgum has recently filed a waiver to the Appraisal Subcommittee to temporarily waive certification requirements for the state. Therefore, regardless if the waiver is accepted, North Dakota would benefit from these new relaxed standards by the AQB, and NDBA should likely support such new legislation. 2

TABLE OF CONTENTS Old AQB Standards (Before May, 2018)... 4 Old AQB Standards... 4 Current North Dakota Standards... 4 Updated AQB Standards (After May, 2018)... 5 Licensed Residential Appraiser Requirements... 6 Certified Residential Appraiser Requirements... 6 Gov. Burgum s ASC Waiver... 7 Background of Waiver Application.. 7 ASC Power to Waive Certification. 8 Conclusion... 8 3

OLD APPRAISER STANDARDS (Before May, 2018) AQB Standards 1 Before May, 2018 the AQB required appraisers to have at least a Bachelor s degree plus the following requirements to become a qualified appraiser: Applicant must complete 75-hours of qualifying education specified in the Required Core Curriculum; The 15-Hour National USPAP Course (or its equivalent) to obtain a state credential; Once credentialed, take the 7-Hour National USPAP Update Course (or its equivalent) once every two calendar years All qualifying education must be completed within the five year period immediately preceding the date of application for a Trainee Appraiser credential North Dakota Standards 2 These are the current requirements for the various classifications of appraisers in North Dakota. These classifications are set by the ND Appraisal Board and in the North Dakota Century Code. These standards currently reflect the old AQB standards (above) before the education changes made last May. Apprentice Appraiser Classification: Education: High School graduate or equivalent, or higher. 75 hours of Board approved real estate appraisal qualifying education covering the required core curriculum* as established by the Appraisal Qualifications Board of The Appraisal Foundation. In addition, an applicant for the apprentice level must complete a course specifically oriented to the requirements and responsibilities of a supervisory appraiser and an apprentice appraiser. Education must have been obtained within the 5-year period immediately preceding making application. Experience: None Examination: Open-Book Examination covering NDCC 43-23.3 (ND Real Estate Appraiser Statute) and ND Administrative Code Title 101 (ND Appraiser Rules & Regulations). Supervisor: Prior to issuance of an apprentice permit, the applicant for the apprentice level is required to submit verification of registration of a supervisory appraiser. 1 Appraiser Qualifications Board - https://appraisalfoundation.sharefile.com/share/view/scbea7640298440aa 2 ND Appraisal Board - http://ndappraiserboard.org/appraisers--rosters.html 4

Licensed Appraiser Classification: Education: 30 semester hours of college level education or higher. 150 hours of Board approved real estate appraisal qualifying education covering the required core curriculum* as established by the Appraisal Qualifications Board of The Appraisal Foundation. Experience: 2000 hours over a minimum of 12-month period. Examination: Uniform State Licensed Appraiser Examination. Education and experience must be in place prior to sitting for the examination. (Successful completion of the examination is valid for a 24-month period) Certified Residential Appraiser Classification: Education: Bachelor Degree or higher; 200 hours Board approved real estate appraisal qualifying education covering the required core curriculum* as established by the Appraisal Qualifications Board of The Appraisal Foundation. Experience: 2500 hours over a minimum of 24-month period. Examination: Uniform State Certified Residential Appraiser Examination. Education and experience must be in place prior to sitting for the examination. (Successful completion of the examination is valid for a 24-month period) Certified General Appraiser Classification: Education: Bachelor s Degree or higher 300 hours Board approved real estate appraisal qualifying education covering the required core curriculum* as established by the Appraisal Qualifications Board of The Appraisal Foundation. Experience: 3000 hours over a minimum of 30-month period. Examination: Uniform State Certified General Appraiser Examination. Education and experience must be in place prior to sitting for the examination. (Successful completion of the examination is valid for a 24-month period) UPDATED AQB STANDARDS (As of May 1, 2018) Changes by the AQB 3 As of May 1, 2018 the AQB has put into place new education requirements for becoming a Licensed Residential Appraiser and a Certified Residential Appraiser. Before the new amendments all appraisers were required to have at least a bachelor s degree to qualify, along with proper training and on-job hours. 3 Appraiser Qualifications Board - https://appraisalfoundation.sharefile.com/share/view/scbea7640298440aa 5

Licensed Residential Appraiser The Licensed Residential Real Property Appraiser 4 classification applies to the appraisal of non-complex one-to-four residential units having a transaction value less than $1,000,000, and complex one-to-four residential units having a transaction value less than $250,000. As of this May, new Licensed Residential Appraisers prospects are not required to have any college-level education. Certified Residential Appraiser The Certified Residential Real Property Appraiser 5 classification qualifies the appraiser to appraise one-to-four residential units without regard to value or complexity. Those that wish to become Certified Residential Appraisers now have six options to become licensed, they are as follows: 1. Bachelor s degree in any field of study; 2. Associates Degree in a field of study related to: a. Business Administration; b. Accounting; c. Economics; or d. Real Estate 4 Appraiser Qualifications Board - https://appraisalfoundation.sharefile.com/share/view/scbea7640298440aa 5 Appraiser Qualifications Board - https://appraisalfoundation.sharefile.com/share/view/scbea7640298440aa 6

3. Successful completion of 30 semester hours of college-level courses that cover each of the following specific topic areas and hours: a. English Composition (3 hours) b. Microeconomics (3 hours) c. Macroeconomics (3 hours) d. Finance (3 hours) e. Algebra, Geometry, or Higher Math (3 hours) f. Statistics (3 hours) g. Computer Science (3 hours) h. Business Law or Real Estate Law (3 hours) i. Two elective courses in any of the above topics, or in Accounting, Geography, Agricultural Economics, Business Management, or Real Estate(3 hours each) 4. Successful completion of at least 30 semester hours of College Level Examination Program (CLEP) examinations; 5. Any combination of Option #3 and Option #4 that includes all of the topics identified in Option #3; 6. No college-level education required. a. This option only to appraisers who have held a Licensed Residential credential for a minimum of five (5) years and have no record of any adverse, final, and non-appealable disciplinary action affecting the Licensed Residential appraiser s legal eligibility to engage in appraisal practice within the five (5) years immediately preceding the date of application for a Certified Residential credential. GOVERNOR BURGUM S ASC WAIVER Background of Waiver Application On August 1 st, Governor Burgum submitted a waiver 6 to the Appraisal Subcommittee to relax the requirements on appraisers in North Dakota. Due to scarcity of appraisers and stringent regulations, North Dakota has experienced significant delays in appraisals. If the waiver is approved, it will relax requirements for federally related real estate mortgage loan transactions for which a bank or credit union is the mortgagee and for which the principal balance, secured by real estate within North Dakota, does not exceed $1 million for a business or farm loan or $500,000 for a residential real estate transaction. 6 North Dakota s application to the ASC for a waiver of requirements: https://www.nd.gov/dfi/sites/www/files/documents/press%20releases/nd%20appraisal%20waiver.pdf 7

ASC Power to Waive Certification Section 1119(b) of Title XI allows the ASC, subject to concurrence of the FFIEC, to temporarily waive certification or licensing requirements when, in a particular area: 1. There is a scarcity of appraisers; and 2. The scarcity is leading to significant delays in appraisal services for federally related transactions (FRTs). CONCLUSION It s likely that NDBA would want to support new legislation to match the updated AQB standards. Matching the AQB minimum standards will relax the educational requirements for new appraisers to become licensed. North Dakota currently has a shortage of appraisers and Governor Doug Burgum has recently filed a waiver to the Appraisal Subcommittee to temporarily waive certification requirements for the state. Therefore, regardless if the waiver is accepted, North Dakota would benefit from these new relaxed standards by the AQB, and NDBA should likely support such new legislation. 8