During the sellers’ market of the early 2000’s, FHA loans were the forgotten stepchild of the mortgage business.  No seller would even talk to a buyer approved through FHA or VA.  One big reason for that avoidance was the FHA appraisal and related property issues.  

All that has changed.

While an FHA approved appraiser must still be used, the rest of FHA’s appraisal requirements have been brought into parity with those of conventional loans.   Here are some key improvements:

Pest reports:  No longer required.  Pest reports used to be an FHA fact of life, and every structure on the property—the broken down shed in the back forty included—had to be inspected.  The seller was required to fix or tear down that shed and repair all Section I & Section II inspection items.  Today, even if a pest report is written into the Contract as a condition of purchase, the lender will likely only ask for a letter signed by the buyer confirming that all conditions of the Contract have been met.  The only time a pest report will be required is when the appraisal calls for it.

(read on)