In real estate, appraisal bias can keep homeowners from receiving the full value of their home. IDFPR Deputy Secretary Ericka Johnson breaks down what appraisal bias is, how exactly it affects consumers, and what you can do if you believe you’re a victim in our newest episode of Making Cents of Money.
Show Notes:
HUD: Appraisal Bias and the Valuation Process - https://www.hudexchange.info/programs/housing-counseling/housing-counseling-today/appraisal-bias-and-the-valuation-process/
NPR: Racial Bias often creeps into home appraisals. Here’s what’s happening to change that -https://www.npr.org/2023/03/13/1161713496/home-appraisals-racial-bias-black-latino-homeowners-lawsuit
Making Cents of Money podcasts:
- Buying a Home! (ep. 36): https://soundcloud.com/idfpr/episode-36-buying-a-home
- Mortgages (ep. 38): https://soundcloud.com/idfpr/episode-38-mortgages
- Credit Access (ep. 42): https://soundcloud.com/idfpr/episode-42-credit-access
- Selling a Home (ep. 45): https://soundcloud.com/idfpr/episode-45-selling-a-home
- The Community Reinvestment Act (ep. 47): https://soundcloud.com/idfpr/episode-47-the-community-reinvestment-act
- Help for Homeowners (ep. 63): https://soundcloud.com/idfpr/episode-63-help-for-homeowners
- Lines of Injustice: What is Redlining? (ep. 83): https://soundcloud.com/idfpr/episode-83-lines-of-injustice-what-is-redlining
- The Federal Community Reinvestment Act (CRA) (ep. 85): https://soundcloud.com/idfpr/episode-85-the-federal-community-reinvestment-act-cra
- The Illinois Community Reinvestment Act (ep. 86): https://soundcloud.com/idfpr/episode-86-the-illinois-community-reinvestment-act
Research
• How racial bias in appraisals affects the devaluation of homes in majority-Black neighborhoods (Brookings, 2022): https://www.brookings.edu/articles/how-racial-bias-in-appraisals-affects-the-devaluation-of-homes-in-majority-black-neighborhoods/
• HUD reaches groundbreaking settlement with The Appraisal Foundation to ensure equal opportunity in the appraisal profession (HUD, 2024): https://www.hud.gov/press/press_releases_media_advisories/HUD_No_24_176
• Racial and ethnic valuation gaps in home purchase appraisals (FreddieMac, 2021): https://www.freddiemac.com/fmac-resources/research/pdf/202109-Note-Appraisal-Gap.pdf
Government Resources and Legislative Efforts:
• How to become an appraiser in Illinois:
https://idfpr.illinois.gov/content/dam/soi/en/web/idfpr/forms/dre/hdi/how-do-i-become-an-appraiser-in-illinois.pdf
• Fair Housing and Equal Opportunity from HUD: https://www.hud.gov/fairhousing
• PAVE Interagency task force on property appraisal and valuation equity (HUD): https://pave.hud.gov/
• Protecting homeowners from discriminatory home appraisals (CFPB, 2023): https://www.consumerfinance.gov/about-us/blog/protecting-homeowners-from-discriminatory-home-appraisals/
• IDFPR Real Estate Valuation Task Force: https://idfpr.illinois.gov/profs/boards/rev-task-force.html
• IDFPR “How To” Series from the Division of Real Estate: https://idfpr.illinois.gov/dre/howtoseriesdre.html
