What is defined as an official FHA appraisal of a specific property to determine loan insurance?

A Conditional Commitment refers to the official FHA appraisal of a specific property, which is conducted to evaluate the property’s value and condition in order to determine eligibility for loan insurance. This appraisal helps ensure that the property meets the minimum standards set by the FHA for safe and decent housing. The FHA’s Conditional Commitment provides lenders with assurance regarding the insurability of the loan, allowing them to proceed with the underwriting process.

Other terms, such as Mortgage Insurance Premium, refer to the cost associated with FHA loans, which is separate from the appraisal process. Private Mortgage Insurance is a type of insurance typically required for conventional loans when the borrower has a down payment of less than 20% and does not relate directly to an FHA appraisal. A Certificate of Eligibility is a document that verifies the borrower’s eligibility for a VA loan and does not apply to FHA appraisals.