Officials end PAVE initiatives that root out bias in real estate appraisals
The US Department of Housing and Urban Development (HUD) has officially ended several key policies introduced under the Biden administration to combat racial and ethnic bias in home valuations.
The rescinded policies, implemented in 2021 and 2024 under the Federal Housing Administration (FHA), were designed to address concerns about racial and ethnic bias in the valuation of homes. They included initiatives such as Reconsideration of Value (ROV) procedures and stricter compliance measures under fair housing laws. The policies were based on recommendations from the Property Appraisal and Valuation Equity (PAVE) task force, an interagency initiative launched in June 2021.
HUD Secretary Scott Turner and Acting Office of Management and Budget (OMB) official Jeffrey Clark jointly announced the rollback of these measures, describing them as excessive and counterproductive.
“By tearing down these onerous hurdles, we’re freeing professionals from a tangle of red tape that drove up costs, inhibited access to homeownership, and discouraged market participation,” Turner said in a press release. “Under President Trump’s leadership, the Biden-era’s obsession with DEI and overregulation is over.”
Among the rescinded policies are: Appraisal Fair Housing Compliance and Updated General Appraiser Requirements (ML 2021-27), Appraisal Review and Reconsideration of Value (ROV) (ML 2024-07), and Extension to the Effective Date of ROV Updates (ML 2024-16).
These directives had required lenders and appraisers to apply new anti-discrimination guidance, enhance reconsideration of value processes, and expand appraisal reviews under fair housing rules.
Clark framed the action as a correction of what he described as misguided policy.
“Wokeism at HUD was brass-tacks economic policy that snatched away the American Dream of homeownership from an entire generation. That ends today.”
The decision aligns with Executive Orders issued by President Trump, including those aimed at ending what the administration labels as “radical and wasteful government DEI programs.”
Officials said the move would remove regulatory barriers and allow the FHA to better serve American homebuyers.
The Biden-era PAVE initiative had drawn industry support, including from the Mortgage Bankers Association (MBA).
“While the role of mortgage lenders in the appraisal process is limited by design, MBA and its members are committed to working with policymakers and other stakeholders… to develop solutions that ensure borrowers receive a fair and accurate estimate of the value of their homes bias,” MBA president and CEO Bob Broeksmit said in a 2022 statement.
However, the Trump administration emphasized alternative data interpretations. Findings from the American Enterprise Institute (AEI) were cited to argue that appraisal gaps reflect factors such as credit scores and household formation, rather than systemic racial bias.
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“These actions were driven by claims of race-based disparities in home values, mortgage denial rates, and appraisal under-valuations… [but] similar disparities [exist] in white communities with similar socioeconomic status,” said AEI Housing Center co-directors Tobias Peter and Ed Pinto.
While HUD has removed the Biden-era standards, the department confirmed that existing fair housing laws remain fully in effect. The Fair Housing Act and Equal Credit Opportunity Act, which prohibit discrimination in homebuying and lending, will continue to be enforced.
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