Source: 15 U.S. Code § 1639h — Property Appraisal Requirements (for
higher-risk mortgages)
Enacted as: Truth in Lending Act (TILA) § 129H, added by the Dodd-Frank Wall
Street Reform and Consumer Protection Act (Pub. L. 111-203), Title XIV, § 1471,
July 21, 2010, 124 Stat. 2185.
Official source: https://www.law.cornell.edu/uscode/text/15/1639h (U.S. Code
mirror; statutory text is a U.S. government work, public domain, 17 U.S.C. §105)
Retrieved: July 28, 2026
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(a) In general
A creditor may not extend credit in the form of a higher-risk mortgage to any
consumer 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), 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 within 180
days of the purchase or acquisition of such property by that person at a
price that was lower than the current sale price of the property, the
creditor 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) may not be charged to the applicant.
(3) Certified or licensed appraiser defined
For purposes of this section, the term "certified or licensed appraiser" means
a person who—
(A) is, at a minimum, certified or licensed by the State 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
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 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, the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, the National Credit Union Administration
Board, the Federal Housing Finance Agency, and the Bureau shall jointly
prescribe regulations to implement this section.
(B) Exemption — The agencies listed in subparagraph (A) may jointly exempt, by
rule, a class of loans from the requirements of this subsection or subsection
(a) if the agencies determine that the exemption is in the public interest and
promotes the safety and soundness of creditors.
(c) Free copy of appraisal
A creditor shall provide 1 copy of each appraisal conducted in accordance with
this section in connection with a higher-risk mortgage to the applicant
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 shall be
provided with a statement by the creditor that any appraisal prepared for the
mortgage is for the sole use of the creditor, and that the applicant may
choose to have a separate appraisal conducted at the expense of the
applicant.
(e) Violations
In addition to any other liability to any person under this subchapter, a
creditor found to have willfully failed to obtain an appraisal as required in
this section shall be liable to the applicant 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, other than a reverse mortgage loan that is a
qualified mortgage, as defined in section 1639c of this title, secured by a
principal dwelling—
(1) that is not a qualified mortgage, as defined in section 1639c of this
title; 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, 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 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;
(B) by 2.5 or more percentage points, in the case of a first lien residential
mortgage loan 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; and
(C) by 3.5 or more percentage points for a subordinate lien residential
mortgage loan.