The Federal Housing Administration has relaxed its appraisal standards so that sellers don't have to make minor repairs to properties that are sold to homebuyers using FHA-insured mortgages.The change is part of an effort to bring FHA practices more in line with the conventional market and to boost the agency's market share. The FHA has already adopted Fannie Mae appraisal forms, and now it is telling lenders that repairs are no longer necessary for "cosmetic defects, minor defects or normal wear and tear," according to a mortgage letter. Starting Jan. 1, the FHA is also relaxing its inspection requirements for termites, wells, and septic systems. "I think they have come closer to conventional appraisals requirements," said Bud Carter, an FHA consultant with Potomac Partners in Washington. "It will be helpful." Currently, many real estate agents and sellers won't accept offers by homebuyers using FHA financing because of the inspection and repair requirements.

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