On March 19, the FHA rescinded three mortgagee letters related to appraisal policies in its Single Family Housing programs through Mortgagee Letter 2025-08. The letter rescinds FHA Single Family Housing policy changes issued in ML 2021-27, Appraisal Fair Housing Compliance and Updated General Appraiser Requirements; ML 2024-07 Appraisal Review and Reconsideration of Value Updates; and ML 2024-16, Extension to the Effective Date of Appraisal Review and Reconsideration of Value (ROV) Updates. The letter restores previous policy, and its provisions are effective immediately.

The letter explained the reasons for the rescissions. On November 17, 2021, FHA published ML 2021-27 regarding compliance with fair housing laws related to property appraisals, as there were concerns that the Uniform Standards of Professional Appraisal Practice (USPAP) Ethics Rule insufficiently addressed the issue. But since the publication of ML 2021-27, the USPAP Ethics Rule has been enhanced to clearly require adherence to fair lending laws — so ML 2021-27 is no longer needed. MLs 2024-07 and 2024-16 aimed to expand HUD’s existing ROV processes to include a borrower-initiated ROV process. In October 2024, FHA began collecting data to track borrower-initiated ROV requests and their outcomes, but the short time frame left insufficient data to draw conclusions on the policy’s impact. Those MLs are now being rescinded in line with the President’s Executive Orders to reduce regulatory burdens that “have adversely affected key sectors, including the housing market.”