FHA Appraisal Requirements... Are they as strict as they used to be?

Real Estate Agent with Realty ONE Group

I recently read a refreshing article about how FHA appraisal guidelines are not as strict as they used to be. I am hoping the appraisers will start taking this to heart because I have had some crazy requirements with FHA Appraisals ( carpet needing to be cleaned and the grass to be mowed seem to come to mind).

Steve Lines with Academy Mortgage writes in the Arizona Journal of Real Estate & Business about the requirements. Basically he states that FHA permits an "AS IS" appraisal for FHA loans for property's that have problems that have occurred from lack of maintenence or normal wear and tear. These guidelines have been in place since January 2006, but I haven't run into an appraiser who has done it that way yet.

FHA does state what is a Definite Repair Needed:

Inadequate access from bedrooms to exterior of home.

Leaking Roofs

Structural Problems (foundation, trusses, beams etc)

Defective Paint if constructed before 1978

Defective exterior Paint constructed after 1978 if finish is not protected


Other than those most other items can pass an FHA Appraisal. Good to know if you didn't already know this! The majority of loans I have done in the last 2 years are FHA, so I am always looking for more information so I can know what to expect for my buyers.




Posted by

Betsie Melter, REALTOR, GRI, ABR

Realty ONE Group

3530 S. Val Vista Dr. #114 Gilbert, AZ 85297





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Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

I have found if the front steps leading up to the house are in disrepair it almost always means an inspection failure. Also had one fail because the drive left no room to turn around.

Jun 08, 2010 09:57 AM #1
Rodney Mason
On Q Financial - Atlanta, GA
FHA 203(k) & HomeStyle Renovation-AL,FL,GA,TN

Typically, anything affecting safety, security, or saleability must be addressed.  The changes were addressed in mortgagee letter 2005 ML-48.  Gone are the days of properties failing FHA because of torn wallpaper or other minor issues.  Some of the most common issues requiring repair are:

  • Exposed electrical wiring
  • Wood to earth contact
  • Peeling/flaking exterior paint
  • Exposed exterior wood



Jun 08, 2010 03:25 PM #2
Betsie Melter
Realty ONE Group - Chandler, AZ

Thanks for the clarification Rodney.

Jun 22, 2010 08:43 AM #3
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