Examining Evidence of Racial Equality In Home Appraising and Valuation In the Philadelphia Metropolitan Area By: Ira Goldstein, Reinvestment Fund & Gregory D. Squires, Research Professor and Professor Emeritus in the Department of Sociology at George Washington University; with Alana Kim and Zoe Millstein, Reinvestment Fund Abstract This Brief examines racial equality in the appraisal and valuation homes receive as part of the process to obtain a mortgage to purchase a home or to refinance an existing mortgage. The first sections of the Brief utilize county-level summaries from the Federal Housing Finance Agency’s (FHFA) Uniform Appraisal Dataset (UAD). These data offer a contemporary overview and trends in the volume, type, and average dollar value of completed appraisals for purchase and refinance mortgages. The next section also offers a county-level presentation of the degree to which appraisals for home purchases comport with sale prices. Bringing the analysis closer to neighborhood-level patterns, the next section focuses on Philadelphia, the central city of the region. FHFA UAD data are used to observe any patterns in the degree to which appraisals connected with GSE-related home purchase mortgages match sale prices. This effort has limits because, in recent years, the UAD has a substantial amount of data suppression at the census tract level making sub-city generalizations less secure than larger geographies. In fact, although 2023 UAD data are presented for purposes of completeness, the magnitude of data suppression necessitates that any patterns they represent be considered with a dose of skepticism. The final section of this Brief uses data reflective of applications for cash-out refinances that were denied with the stated denial reason being “collateral.” Collateral, or the value (as established typically by an appraiser) of the home that is pledged to secure a mortgage, is one of multiple reasons a lender may have to deny a mortgage application.1 Other reasons include credit history, debt-to-income ratio, employment history, mortgage insurance denied, and others. Cash-out refinances were selected for this analysis because: (a) many of the alleged cases of discrimination involved refinance transactions, and (b) cash-out refinances are less likely than non-cash-out refinances to involve valuation from an automated valuation model, or AVM. The two analyses, using different data reflective of different kinds of transactions, point to a similar finding: if you are Black or Hispanic or live in a minority neighborhood, it is more likely that you will have an appraisal that is less than the market value of your home. And if you are a Black homeowner or live in a predominantly Black neighborhood in Philadelphia, you are more likely to have your application to refinance your mortgage denied because of your collateral.