FHA Seeks Public Comment Regarding Minimum Property Requirements

[HUDSHARM]

FHA Seeks Public Comment Regarding Modernizing Its Single Family Housing Minimum Property Requirements​

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Today, the Federal Housing Administration (FHA), published a Request for Information (RFI) Regarding Single Family Minimum Property Requirements (MPR) (Docket No. FR-6609-N-01) in the Federal Register for public comment. FHA’s Minimum Property Requirements (MPR) have long supported the safety and soundness of the single family homes the agency insures. However, these standards have not undergone a comprehensive update in over two decades and no longer reflect current industry practices. FHA MPRs are dated, creating unnecessary burdens that increase housing costs, discourage industry participation, limit access to FHA financing — particularly for first time and low- to moderate-income American homebuyers — and outweigh the benefits they provide. To rectify this — and in line with the administration’s overall efforts to reduce burdensome regulations and minimize undue costs — FHA has issued today’s RFI seeking stakeholder comment on ways in which to modernize and streamline program requirements. This feedback will guide efforts to ultimately align the agency’s MPR standards with today’s industry practices. While FHA is interested in hearing all perspectives, it is particularly interested in receiving input on the following topics: What are the advantages and/or disadvantages of FHA’s current MPRs? How could FHA streamline and/or simplify its MPR policies? Are there important factors FHA should consider when modernizing MPR policies? What specific FHA MPRs are no longer applicable or necessary? Do current FHA MPRs adequately protect borrowers utilizing FHA-insured single family mortgage programs to finance a home? Are MPRs clearly communicated in FHA policies? Is the FHA-approved appraiser’s scope of work to identify MPR deficiencies aligned with modern appraisal practices? Interested stakeholders are encouraged to review and provide comments following the methods outlined in the RFI (Docket No. FR-6609-N-01) through June 29, 2026.

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https://appraisersblogs.com/systemic-failures-in-FHA-appraisal-n-loan-review/#google_vignette

 

[HUDSHARM]

While the Federal Housing Administration (FHA) seeks to streamline and modernize its Minimum Property Requirements (MPR) to reduce regulatory burdens, any modernization efforts must aggressively address the catastrophic loophole where lax reporting, broken appraisal management company (AMC) oversight, and deficient loan review tiers completely strip away borrower protections.
What is the point of requiring MPRs if they are not enforced? Unenforced MPRs create a dangerous, false sense of security for consumers who trust that an FHA-insured property is safe, sound, and secure. When the system fails to enforce these baselines, MPRs cease to be a protective shield and instead become a bureaucratic facade. This facade greenlights defective homes for closing while actively concealing hazards from the very buyers the program is designed to protect.
As demonstrated by the public case study “Systemic Failures in FHA Appraisal and Loan Review” (published May 2026 on AppraisersBlogs),
Systemic Failures in FHA Appraisal and Loan Review - Appraisers Blogs
the greatest threat to first-time and low-to-moderate-income homebuyers is not the stringency of MPR standards themselves, but the total collapse of the upstream enforcement and validation mechanisms. When basic eligibility factors—such as private well and septic separation distances—are misreported or ignored, it bypasses the entire FHA safety net. This leads directly to unhabitable housing, consumer financial distress, and avoidable foreclosures. Modernization must balance administrative simplicity with rigid enforcement accountability.
II. The Blind Spot: Lender and AMC Coercion of Appraisers
Cont. Attached.

Systemic Failures in FHA Appraisal and Loan Review - Appraisers Blogs

This case exposed cracks in an FHA system where failures by the lender, AMC, & review aligned in ways no borrower saw coming.

appraisersblogs.com

https://www.regulations.gov/document/HUD-2026-0727-0001

 

[Fritz in NY]

Maybe, someone in the G'ment is seeing the light. AMC's, Sleazy MTG. brokers and Realtors will do ANYTHING to make the Quota, Make the deal work. Collect the $$$$.
It's human nature if you don't care about the 1st timer or desperate buyer that needs a house. Make the AMC, Lender. Broker Happy at all cost, or be gone from there radar.
I don't care what the issues are, I see what I see, report what I saw and let the AMC or Lender attempt to make the bad go away.

 

[OSU Beavers]

Go back to the rotating panel system that HUD had prior to 1994 so they buyer at least has a chance to get an honest appraiser. Keep the eligible appraisers local so the broker can't bring in a ringer from out of state.

 

[jay trotta]

Taken from above;
When basic eligibility factors—such as private well and septic separation distances—are misreported or ignored, it bypasses the entire FHA safety net. This leads directly to unhabitable housing, consumer financial distress, and avoidable foreclosures. Modernization must balance administrative simplicity with rigid enforcement accountability.
II. The Blind Spot: Lender and AMC Coercion of Appraisers

Further supports OSU rotation methodology, to support modernization of proven factors.

 

[Dublin ohio]

I can remember when I took the test to become an FHA appraiser years ago. IMO it was magnitudes more difficult than the test I took to get my license. What did they expect when they threw the doors wide open to any CR and left the responsibility to "learn" and "interpret" HUD/FHA regs to the individual appraiser. That being said, some of the regs are a little vague and lend themselves to interpretation by the appraiser. They need to make some of the regs more "black and white".

 

[Mike Ault]

I had a friend at the FHA regional field office who was exasperated at the appraisals they were receiving back after they opened up the panel and one day she told me "before we agreed to the lender select process the lenders promised us they would handle all the education needed to ensure their appraisers followed FHA guidelines from that point forward. That never happened."

 

[Dublin ohio]

"before we agreed to the lender select process the lenders promised us they would handle all the education needed to ensure their appraisers followed FHA guidelines from that point forward. That never happened."

And most of the lenders abdicated that responsibility to the AMCs. What could've possibly gone wrong

 

[HUDSHARM]

I had a friend at the FHA regional field office who was exasperated at the appraisals they were receiving back after they opened up the panel and one day she told me "before we agreed to the lender select process the lenders promised us they would handle all the education needed to ensure their appraisers followed FHA guidelines from that point forward. That never happened."

And now they let the lender “self report” their crimes.

 

[HUDSHARM]

Taken from above;
When basic eligibility factors—such as private well and septic separation distances—are misreported or ignored, it bypasses the entire FHA safety net. This leads directly to unhabitable housing, consumer financial distress, and avoidable foreclosures. Modernization must balance administrative simplicity with rigid enforcement accountability.
II. The Blind Spot: Lender and AMC Coercion of Appraisers

Further supports OSU rotation methodology, to support modernization of proven factors.

II. The Blind Spot: Lender and AMC Coercion of Appraisers


This Request for Information (RFI) completely misses a structural reality: appraisers are


routinely pressured, blacklisted, and threatened by lenders and AMCs to completely


ignore or remove MPR deficiencies.


• The Intentional Deletion of Guardrails: MPR policies exist precisely to prevent the


exact catastrophic outcome seen in the baseline case: an avoidable foreclosure.


However, because lenders and AMCs operate under volume-driven profit models,


they view MPR compliance as a threat to their loan volume.


• The Threat of Economic Retaliation: When an ethical appraiser notes a critical


environmental or structural hazard (such as a septic system contaminating a water


source), the lender or AMC frequently demands the deletion of the deficiency. If the


appraiser refuses, they are retaliated against by being removed from panel rosters or


denied future assignments. This coercion forces the systemic erasure of property


defects before the loan ever reaches HUD underwriting.


• Recommendation: FHA's modernization must strengthen Appraiser Independence


Requirements (AIR) by implementing severe, mandatory civil penalties for any


lender or AMC executive found to have pressured an appraiser to modify or omit an


MPR defect. Furthermore, FHA must create an anonymous, expedited reporting


portal directly linked to the HUD Office of Inspector General (OIG) for appraisers to


flag compliance coercion.