What is the difference between an FHA appraisal and a conventional appraisal?

An FHA appraisal supports an FHA-insured mortgage and must be performed by an FHA Roster appraiser who is state certified and listed on the Appraisal Subcommittee's National Registry. A conventional appraisal follows lender and Fannie Mae or Freddie Mac rules, which allow a trainee to perform a significant amount of the work under a supervisory appraiser who signs and takes responsibility for the report. FHA assignments are stricter: HUD prohibits anyone other than the assigned FHA Roster appraiser from signing or conducting critical tasks such as selecting comparables.

An FHA appraisal determines both the home's market value and whether it meets HUD's minimum property requirements for safety, soundness, and security. The appraiser checks working heating, electrical, and plumbing systems, a roof with at least two years of remaining life, safe road access, and an undamaged foundation with adequate drainage. A conventional appraisal establishes market value without the HUD property requirements review.

An FHA appraisal must satisfy U.S. Department of Housing and Urban Development (HUD) property standards that a conventional appraisal does not. The FHA appraiser makes a complete visual inspection of the interior and exterior, completes the Valuation Conditions form, and photographs the sides, front, rear, and street frontage of the property. Required repairs are limited to those needed to preserve continued marketability and protect occupant health and safety, such as defective paint in homes built before 1978.