Updated Appraisal Discrimination or Bias Information 

 Effected Programs: All Programs

Attention Lenders:

Update to the previous Bulletin 2024-6: We would like to share two documents that are very helpful to both homebuyers and homeowners regarding appraisal discrimination. Please access the below links, review the documents and provide to your borrowers.

Home Appraisal Discrimination Initiative and Information

Home Appraisal Discrimination Fact Sheet

Appraisal discrimination is a violation of the Fair Housing Act and the New Jersey Law Against Discrimination (LAD). Prohibited discrimination that occurs within the appraisal process is based on protected characteristics including race, color, national origin, religion, sex, gender identity, sexual orientation, or disability.

NJHMFA along with the New Jersey Office of the Attorney General (OAG) and the Division on Civil Rights (DCR) take appraisal discrimination very seriously. Undervalued properties can lead to racial disparities in rates of homeownership and the widening of gaps in racial and ethnic wealth.

LAD specifically prohibits discrimination by home appraisers and also by other entities involved in selecting an appraiser or using the appraisal to decide whether and on what terms to extend a mortgage or other financing to a borrower. All parties included in the appraisal process are considered liable. 

What to look for to determine appraisal discrimination:

• Accuracy of the report.
• Red flags in appraisers’ comments such as language referencing racial or ethnic makeup of an area. 
• Comps do not meet standard criteria, located within 1 mile of the property, in similar condition, close in age, square footage and number of rooms.

If you believe that an appraiser or AMC has violated the Fair Housing Act or LAD or has otherwise committed professional misconduct, you may contact the New Jersey State Real Estate Appraiser Board or file a complaint by visiting the Board’s website:

https://www.njconsumeraffairs.gov/Pages/Consumer- Complaints.aspx

You may also contact DCR by emailing appraisals@njcivilrights.gov.

As the lender, if you believe that the Appraiser or AMC has been unfair, inaccurate, or discriminatory, request a reassessment of value for the property prior to submitting the loan for purchase.

For detailed information and legal guidance regarding appraisal discrimination please access the HMFA website. You may also view the Guidance on Discrimination in Home Appraisals Under the New Jersey Law Against Discrimination.

New Jersey Housing and Mortgage Finance Agency | 609-278-7400 | NJHousing.gov