Which basis for compensation is NOT allowed under USPAP for a mortgage-lender appraisal assignment?

• A. Whether or not the report is transmitted by the due date
• B. The appraised value
• C. The loan amount
• D. The report delivery method

Answer: (C)

Under USPAP, the appraiser’s compensation must not be tied to the outcome of the assignment. When the fee depends on the size of the loan, there’s a built-in incentive to influence the appraisal to support a larger loan, which compromises the appraiser’s independence and objectivity. That’s why basing compensation on the loan amount is not allowed in a mortgage-lender assignment.

The other factors here relate to how the service is delivered or the scope of work (timeliness, delivery method, type of report, etc.) and do not directly tie the fee to the valuation result or the financing outcome. The emphasis remains on ensuring the appraisal conclusions aren’t swayed by how much money the lender hopes to lend.