Which type of loan may require compliance with Appraiser Independence Requirements?

The Appraiser Independence Requirements (AIR) are designed to prevent conflicts of interest and ensure that appraisals are conducted impartially. These requirements are particularly relevant in the context of conventional loans. Conventional loans are typically financed through private lenders and are not backed by government entities like FHA or VA loans. Because of their structure, conventional loans are subject to stringent regulations, including those outlined in AIR.

These requirements apply to loans backed by government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, which often use conventional loan processing. The intention is to maintain the integrity of the appraisal process and ensure that appraisers operate without undue influence from the parties involved in the transaction.

While FHA and VA loans also have oversight and compliance requirements, they are governed by different regulations specific to the functions and objectives of those programs, such as promoting homeownership in specific populations. Subprime loans, meanwhile, are typically associated with higher risk and less regulatory oversight surrounding the appraisal process than what is required for conventional loans. Thus, conventional loans are the right choice when discussing compliance with Appraiser Independence Requirements.