This final rule clarifies HUD's regulations concerning the responsibilities of lenders approved by the Federal Housing Administration (FHA) with respect to appraisals on properties that will be the security for FHA insured mortgages. The final rule clarifies that lenders are accountable for the quality of appraisals on properties securing FHA-insured mortgages. The final rule specifically provides that lenders that submit appraisals to HUD that do not meet FHA requirements are subject to the imposition of sanctions by the HUD Mortgagee Review Board. The final rule applies to both sponsor lenders that underwrite loans, and loan correspondent lenders that originate loans on behalf of their sponsors. The codification of this clarification is designed to ensure lenders are aware of their responsibilities with respect to appraisals, and homebuyers receive an accurate statement of the appraised value of their homes. This final rule follows publication of a January 13, 2003, proposed rule, and takes into consideration the public comments received on the proposed rule. After careful review of the comments, HUD has decided to adopt the proposed rule with minor changes to the regulatory text.