Property approval

The property you're trying to buy with an FHA loan, whether it's a house, a condo, a manufactured home or a multifamily home, has to meet FHA minimum property requirements. The FHA requires an appraisal that's separate (and different from) a home inspection. They want to be sure the home is a good investment — in other words, worth what you're paying for it — and ensure that it meets basic safety and livability standards.

For an FHA 203(k) loan, the property may undergo two separate appraisals: An "as is" appraisal that assesses its current state, and an "after improved" appraisal estimating the value once the work is completed.