Jen,

Keep in mind that this may also affect the value of an appraisal starting in April.

https://www.efanniemae.com/sf/formsdocs/forms/1004mc.jsp

Yes guidelines have been relaxed quite a bit in recent years. I can remember closings being held up due to missing handrail's on stairs or a crack in the sidewalk.

The general guideline now is that anything that represents a health or safety issue will need to be remedied. Usually the appraiser will flag anything suspicious and the underwriter will then require it be fixed. Also, in today's market a lot of these foreclosed homes are missing pipes, windows, kitchens, etc. Things like that need to be dealt with to prior to gaining approval. Things that will normally go through no problem without requiring repair are generally those items that are cosmetic in nature, such as old carpet or paint

Hope this helps!

Alot of the things you have heard about FHA in the past are no longer accurate. They have loosened up the requirements tremendously. The lender will want to see a copy of the inspection report and termite report on occassion. (termite is not required anymore, however most lenders still want an inspection)

Here is info from HUD that will help you:

http://www.hud.gov/offices/hsg/sfh/ref/sfhp1-22.cfm

http://www.hud.gov/offices/hsg/sfh/ref/chap1.cfm

HUD has very much relaxed the property requirements in recent years.