FHA Lowering Requirements

[gregb]

https://www.HUD.gov/sites/default/files/OCHCO/documents/2025-18hsgml.pdf

 

[glenn walker]

The programs are essentially a Govt Insured Sub Prime Loan. A low down low rate 30 year loan. In 2023 we could do manual Underwriting with 575 FICO scores. Not even a car dealer will give that borrower a loan at less than 20% down 18% rate. With seller paid concessions you can get a buyer in with almost zero down. No big deal ya gotta keep the market's alive. Lol

 

[gregb]

Posted by Craig Gilbert on another forum-
"

Mortgage Letter 2025-18 dropped today June 27,2025 EFFECTIVE IMMEDIATELY

My dear friend and Chief Appraiser Lynn-Marie Palmer condensed it down to these main changes for the ACOW newsletter going out next week, but please read the document in its entirety if you do FHA Appraisals.

Remaining Economic Life – No longer required

Absorption Rate Analysis – Only when necessary

Attic & Crawlspace Photos – No longer required

Additional Comparables – Not required beyond USPAP

Original Comp Photos – No longer required

Listings & Market Trends – Encouraged, not mandatory

Mandatory Repairs – Cosmetic/minor repairs excluded unless they affect safety/soundness/security

Mandatory Inspections – Only if there's evidence or it's market custom

Appraiser’s Role Clarified – Appraisers are not inspectors or code officials; visual-only observations"

 

[glenn walker]

Posted by Craig Gilbert on another forum-
"

Wow they should just eliminate the fee panel as it's really just a Conventional as the new Fannie requires pretty much the same things. I'm wondering when VA is going to be ended. It's the one lenders buyers and sellers hate and the high appraisal fees in some states.

 

[glenn walker]

Craig Gilbert is a good appraiser and he does a lot for the profession. Kudo's to him for his service.

 

[NJ Valuator]

Posted by Craig Gilbert on another forum-
"

how long will it take for the "QC reviewers" to realize that this information is no longer required and still ask for it?

 

[glenn walker]

how long will it take for the "QC reviewers" to realize that this information is no longer required and still ask for it?

About a year but remember those are minimum requirements and like one Senior HUD official told me a lender can have higher standards, just not Lower ones. Best to always read engagement letter from client.

 

[Non Sequitur]

how long will it take for the "QC reviewers" to realize that this information is no longer required and still ask for it?

"Our clients still require it." AMC QC Review boilerplate.

I have mixed feelings. Some of the photo requirements were just good practice. In all honesty I never understood the push back for having to show the sides of the subject or angled and original comp photos, but I'm in the minority. Either way, before indie appraisers start dancing in the streets this is just an effort at aligning FHA with stripped down GSE requirements and the push for "modernization." This is not an effort to help indie appraisers.

 

[glenn walker]

"Our clients still require it." AMC QC Review boilerplate.

I have mixed feelings. Some of the photo requirements were just good practice. In all honesty I never understood the push back for having to show the sides of the subject or angled and original comp photos, but I'm in the minority. Either way, before indie appraisers start dancing in the streets this is just an effort at aligning FHA with stripped down GSE requirements and the push for "modernization." This is not an effort to help indie appraisers.

Your implying Kinda slow walk the appraisers closer and closer to hybrids and or limited inspections and when fees are brought up you can tell them their doing less work so less money ?

 

[Non Sequitur]

Your implying Kinda slow walk the appraisers closer and closer to hybrids and or limited inspections and when fees are brought up you can tell them their doing less work so less money ?

Yep.

It's hard enough keeping fees in the 1990's range, removing requirements isn't going to help the cause.