---
kind: "section"
citation: "15 U.S.C. § 1639h"
title: "15"
title_heading: "Commerce and Trade"
number: "1639h"
heading: "Property appraisal requirements"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/1639h"
units:
  - "Chapter 41 — Consumer Credit Protection"
  - "Subchapter I — Consumer Credit Cost Disclosure"
  - "Part B — Credit Transactions"
---

# §1639h. Property appraisal requirements

- (a) **In general—** A [creditor](/usc/15/1602.md?p=g) may not extend [credit](/usc/15/1602.md?p=f) in the form of a higher-risk mortgage to any [consumer](/usc/15/1681a.md?p=c) without first obtaining a written appraisal of the property to be mortgaged prepared in accordance with the requirements of this section.
- (b) **Appraisal requirements—**
  - (1) **Physical property visit—** Subject to the rules prescribed under [paragraph (4)](#b-4), an appraisal of property to be secured by a higher-risk mortgage does not meet the requirement of this section unless it is performed by a certified or licensed appraiser who conducts a physical property visit of the interior of the mortgaged property.
  - (2) **Second appraisal under certain circumstances—**
    - (A) **In general—** If the purpose of a higher-risk mortgage is to finance the purchase or acquisition of the mortgaged property from a [person](/usc/15/1602.md?p=e) within 180 days of the purchase or acquisition of such property by that [person](/usc/15/1602.md?p=e) at a price that was lower than the current sale price of the property, the [creditor](/usc/15/1602.md?p=g) shall obtain a second appraisal from a different certified or licensed appraiser. The second appraisal shall include an analysis of the difference in sale prices, changes in market conditions, and any improvements made to the property between the date of the previous sale and the current sale.
    - (B) **No cost to applicant—** The cost of any second appraisal required under [subparagraph (A)](#b-2-A) may not be charged to the [applicant](/usc/15/1691a.md?p=b).
  - (3) **Certified or licensed appraiser defined—** For purposes of this section, the term “certified or licensed appraiser” means a [person](/usc/15/1602.md?p=e) who—
    - (A) is, at a minimum, certified or licensed by the [State](/usc/15/1602.md?p=s) in which the property to be appraised is located; and
    - (B) performs each appraisal in conformity with the Uniform Standards of Professional Appraisal Practice and title XI of the [Financial Institutions](/usc/15/1681a.md?p=t) Reform, Recovery, and Enforcement Act of 1989 [[12 U.S.C. 3331](/usc/12/3331.md) et seq.], and the regulations prescribed under such title, as in effect on the date of the appraisal.
  - (4) **Regulations—**
    - (A) **In general—** The [Board](/usc/15/1602.md?p=c), the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National [Credit](/usc/15/1602.md?p=f) Union [Administration](/usc/15/636e.md?p=1) [Board](/usc/15/1602.md?p=c), the Federal Housing Finance Agency, and the [Bureau](/usc/15/1602.md?p=b) shall jointly prescribe regulations to implement this section.
    - (B) **Exemption—** The agencies listed in [subparagraph (A)](#b-4-A) may jointly exempt, by rule, a class of loans from the requirements of this subsection or [subsection (a)](#a) if the agencies determine that the exemption is in the public interest and promotes the safety and soundness of [creditors](/usc/15/1602.md?p=g).
- (c) **Free copy of appraisal—** A [creditor](/usc/15/1602.md?p=g) shall provide 1 copy of each appraisal conducted in accordance with this section in connection with a higher-risk mortgage to the [applicant](/usc/15/1691a.md?p=b) without charge, and at least 3 days prior to the transaction closing date.
- (d) **Consumer notification—** At the time of the initial mortgage application, the [applicant](/usc/15/1691a.md?p=b) shall be provided with a statement by the [creditor](/usc/15/1602.md?p=g) that any appraisal prepared for the mortgage is for the sole use of the [creditor](/usc/15/1602.md?p=g), and that the [applicant](/usc/15/1691a.md?p=b) may choose to have a separate appraisal conducted at the expense of the [applicant](/usc/15/1691a.md?p=b).
- (e) **Violations—** In addition to any other liability to any [person](/usc/15/1602.md?p=e) under this subchapter, a [creditor](/usc/15/1602.md?p=g) found to have willfully failed to obtain an appraisal as required in this section shall be liable to the [applicant](/usc/15/1691a.md?p=b) or borrower for the sum of $2,000.
- (f) **Higher-risk mortgage defined—** For purposes of this section, the term “higher-risk mortgage” means a [residential mortgage loan](/usc/15/1602.md?p=dd-5), other than a reverse mortgage loan that is a qualified mortgage, as defined in [section 1639c of this title](/usc/15/1639c.md), secured by a principal [dwelling](/usc/15/1602.md?p=w)—
  - (1) that is not a qualified mortgage, as defined in [section 1639c of this title](/usc/15/1639c.md); and
  - (2) with an annual percentage rate that exceeds the average prime offer rate for a comparable transaction, as defined in [section 1639c of this title](/usc/15/1639c.md), as of the date the interest rate is set—
    - (A) by 1.5 or more percentage points, in the case of a first lien [residential mortgage loan](/usc/15/1602.md?p=dd-5) having an original principal obligation amount that does not exceed the amount of the maximum limitation on the original principal obligation of mortgage in effect for a residence of the applicable size, as of the date of such interest rate set, pursuant to the sixth sentence of [section 1454(a)(2) of title 12](/usc/12/1454.md?p=a-2);
    - (B) by 2.5 or more percentage points, in the case of a first lien [residential mortgage loan](/usc/15/1602.md?p=dd-5) having an original principal obligation amount that exceeds the amount of the maximum limitation on the original principal obligation of mortgage in effect for a residence of the applicable size, as of the date of such interest rate set, pursuant to the sixth sentence of [section 1454(a)(2) of title 12](/usc/12/1454.md?p=a-2); and
    - (C) by 3.5 or more percentage points for a subordinate lien [residential mortgage loan](/usc/15/1602.md?p=dd-5).

## Source credit

(Pub. L. 90–321, title I, § 129H, as added Pub. L. 111–203, title XIV, § 1471, July 21, 2010, 124 Stat. 2185.)

## Notes

### Editorial Notes

### References in Text

The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, referred to in subsec. (b)(3)(B), is Pub. L. 101–73, Aug. 9, 1989, 103 Stat. 183. Title XI of the Act is classified principally to chapter 34A (§ 3331 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see Short Title of 1989 Amendment note set out under section 1811 of Title 12 and Tables.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective on the date on which final regulations implementing such section take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under section 1601 of this title.

### Appraisal Modernization Federally Backed Mortgage Loan Act; Reconsideration of Value

Pub. L. 119–101, title VII, § 704(a), July 11, 2026, 140 Stat. 956, provided that: Federally backed mortgage loan defined.—In this subsection, the term ‘federally backed mortgage loan’ has the meaning given the term in section 4022 of the CARES Act (15 U.S.C. 9056). Requirement.—The Secretary of Agriculture, the Secretary of Veterans Affairs, the Commissioner of the Federal Housing Administration, and the Director of the Federal Housing Finance Agency shall each implement and maintain requirements that creditors of a federally backed mortgage loan have a review and resolution procedure for a consumer-initiated reconsideration of value or subsequent appraisal in connection with a consumer credit transaction secured by a consumer’s principal dwelling.”