Joint Trade Letter to FHA on Appraisals

The Honorable Scott Turner
Secretary
United States Department of Housing and Urban Development
451 7th St. SW,
Washington, DC 20410

RE: Implementing President Trump’s Executive Order “Promoting Access to Mortgage Credit”

Dear Secretary Turner,

On behalf of the undersigned organizations, we write to express our support for the policy opportunities presented by President Trump’s March 13, 2026, Executive Order “Promoting Access to Mortgage Credit.”1 Pursuit of the policy goals outlined in the Executive Order, by the U.S. Department of Housing and Urban Development (HUD) and other agencies, has the potential “to improve the availability and affordability of mortgage credit.”

To that end, we request that HUD work to fulfill the directive of Section 6(b) of the Executive Order, which states:

The Secretary of Housing and Urban Development (HUD) and the Secretary of Veterans Affairs (VA) shall consider, as appropriate and consistent with applicable law:

(i) aligning appraisal standards between the Federal Housing Administration and VA Home Loan Program where risk is comparable;

(ii) clarifying the distinction in an appraisal inspection between safety and habitability concerns that necessitate pre-closing repairs versus cosmetic concerns; and

(iii) expanding post-closing repair flexibility.

Our organizations recommend modernizing the FHA collateral valuation process to align it with the collateral valuation standards established by Fannie Mae and Freddie Mac (collectively, the GSEs). We believe this change could streamline the FHA financing process, making it faster and easier for lenders to produce and consumers to obtain an FHA loan.

The most significant change that we urge FHA to make is to adopt the GSE’s property condition standards as a replacement for the FHA Minimum Property Requirements. The GSE’s strong consumer protection standards are associated with the most widely used financing programs in the market. This change alone, which would still clearly protect FHA borrowers from purchasing substandard housing, would have a substantial impact in reducing the friction that can discourage or disrupt access to the FHA home loan program.

Download the comment letter to read the full text.