Appraisal Modernization: Speeding Up the Pipeline: Blog 4 of 4
President Trump’s Executive Order on Mortgage Credit Discussion Part Four
This is the final post of The Commonwealth Group’s series on the March 13, 2026 Executive Order – “Promoting Access to Mortgage Credit (Federal Register :: Promoting Access to Mortgage Credit) – today’s post is a look at the directives regarding appraisals.
(Read our prior blog post “deep dives” on the Executive Order here:
Part 1 Breaking Down the New "Promoting Access to Mortgage Credit" Executive Order - The Commonwealth Group
Part 2 Deep Dive: Capital and Liquidity Alignment for Smaller - The Commonwealth Group
Part 3 The Digital Shift: Streamlining the Closing Table - The Commonwealth Group
For anyone in the buying, selling, lending, and construction spaces, the "appraisal gap" or the weeks-long wait for a valuation can be a deal killer. Section 6 of the Executive Order, Appraisal Modernization, is designed to break that bottleneck. This is not just about faster paperwork; it is about a fundamental shift in how the industry values residential real estate.
Industry trade groups such as The Appraisal Institute; Mortgage Bankers Association; and the National Association of Realtors have applauded the executive order and its effects on real estate appraisal.
“We appreciate the Administration’s focus on expanding access to mortgage credit and addressing the nation’s housing affordability challenges. Appraisers are also actively integrating new technologies, including artificial intelligence, to strengthen valuation analysis while maintaining strong safeguards for privacy, data security, and professional independence. As policymakers consider potential regulatory changes, it is essential that reliable collateral valuation remain a cornerstone of safe and sound mortgage lending. Independent appraisals provide critical protections for borrowers, lenders, and taxpayers by ensuring mortgage lending decisions are grounded in credible, market-based property valuations,” said Michael J. Acquaro-Mignogna, MAI, SRA, AI-GRS, President of the Appraisal Institute (Appraisal Institute Responds to Executive Order on Promoting Access to Mortgage Credit )
Speaking at the ICE Experience (ICE X26) mortgage conference in Las Vegas after the order was signed, Bob Broeksmit highlighted the importance of moving forward toward a more modern tech-driven system:
"MBA strongly supports efforts to reform appraisals, ease construction regulations, and encourage homebuilding to help address the structural challenges driving up housing costs." (President Trump Issues Executive Orders on Mortgages, Housing Construction – Rhode Island MBA, March 16, 2026)
And from Shannon McGahn EVP for the National Association of Realtors:
“The National Association of REALTORS® welcomes efforts to expand access to mortgage credit and ensure that qualified homebuyers are not unnecessarily shut out of the market. Today’s executive action by President Trump highlights the importance of reviewing regulatory barriers that can increase costs for borrowers and limit the ability of lenders to serve their local markets.” (NAR Statement on President Trump’s Executive Order on Mortgage Lending )
Here are how these changes could specifically lower costs and increase efficiency:
1. Embracing Technology Over Tradition
The order directs agencies to modernize regulations to expand the use of:
AI Valuation Tools: Leveraging artificial intelligence to provide faster, data-driven property assessments.
Desktop and Hybrid Appraisals: Allowing appraisers to complete valuations using digital data and interior/exterior photos provided by third parties, rather than requiring a full, in-person site visit every time.
Alternative Valuation Models: Moving beyond the standard "three-comparables" approach to more dynamic data models.
2. Reducing Requirements for Low-Risk Deals
Not every transaction needs a full-scale forensic appraisal. The EO pushes for reduced requirements in specific categories that frequently bog down community bank portfolios:
Small-Balance Loans: Streamlining valuations for smaller loan amounts where the cost of a traditional appraisal is disproportionately high.
Low Loan-to-Value (LTV) Refinancing: If a borrower has significant equity, the order suggests the risk is low enough to warrant a simplified appraisal process.
Clear Timelines: For the first time, we are seeing a directive to set "clear appraisal timelines" to prevent projects from sitting in limbo.
3. Fixing the "Habitability" vs. "Cosmetic" Conflict
One of the most frustrating parts of the FHA and VA loan process is the "subject to repair" list. The order directs HUD and the VA to:
Clarify Inspection Standards: Creating a clear distinction between actual safety/habitability concerns and purely cosmetic issues that shouldn't hold up a closing.
Post-Closing Flexibility: Expanding the ability to handle minor repairs after the loan has closed, rather than forcing them to be finished before the keys are handed over.
Agency Alignment: Ensuring FHA and VA standards are aligned so builders don't have to navigate two different sets of rules for comparable risks.
The Commonwealth Group Takeaway
For everyone in the home buying arena, buyers, sellers, lenders, builders, and real estate agents, time is money. By simplifying appraiser qualification requirements and allowing for digital-first valuations, this order aims to shave weeks off the closing cycle. For future deals, this could mean lower costs and a much smoother transition from "contract" to "sold."
At The Commonwealth Group, we are helping our lender customers integrate these new digital standards into their business operations today. For more information on the suite of services offered by The Commonwealth Group, contact Martin Luplow at [email protected] .
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