Originally published in the June 16, 2026, issue of AI’s Appraisal Now
Reprinted with permission from AI

The Appraisal Institute recently submitted comments to the Office of Management and Budget (OMB) supporting a proposed rule that would continue to require independent appraisals when donated real property is used to satisfy matching requirements under federal grant programs.

While the proposal is part of a broader Administration effort to revise federal grant regulations, the treatment of donated land, buildings, easements, and other real property interests carries important implications for taxpayers and program integrity.

Under many federal programs, donated property may be counted toward the non-federal share of a project. As a result, the value assigned to that property can directly affect project eligibility, matching requirements, and the amount of federal assistance ultimately provided.

In its comment letter, the Appraisal Institute noted that the valuation of donated property is not merely an accounting exercise. When property values are overstated, federal expenditures may exceed the level of support intended by Congress or program administrators. Independent appraisals help ensure that matching contributions are based on credible market evidence and provide a safeguard against both the intentional and unintentional inflation of non-federal contributions.

The Appraisal Institute also urged the OMB to continue relying on fair market value established through independent appraisal rather than property tax assessments or other administrative valuation measures, which can vary significantly among jurisdictions and may not reflect current market conditions.

According to the Appraisal Institute, independent appraisals are particularly important in economic development, redevelopment, infrastructure, housing, and conservation projects, where donated property often represents a substantial portion of the required local contribution and may involve complex valuation issues related to future development expectations, zoning changes, or public investments.

The Appraisal Institute's comments emphasized that independent appraisals provide transparency, create an auditable record for federal agencies and inspectors general, and help ensure the consistent treatment of grant applicants nationwide.

As the OMB considers public comments on the proposal, the Appraisal Institute continues to advocate for valuation standards that promote accountability, program integrity, and responsible stewardship of taxpayer resources.