One of the things that makes FHA loans less desirable is the perception that FHA loans scrutinize the property so much more than conventional loans, which is much less the case now than ever. There is an amendatory clause to the contract that must be signed for FHA loans says something about the buyer being able to back out if the house doesn't appraise, however very often if the house doesn't appraise, and the seller doesn't lower their price, the buyer can't come up with the extra money needed for a conventional loan either, so to me that excuse is irrelevant. People have memories of years gone by when the dreaded handrail was asked for on an FHA appraisal, thinking that this does not happen on conventional. It can be the case on either these days, because no lender wants the liability of a staircase without a handrail, that may not be to code any more. There have been a lot of changes through the years. People got away from FHA when there were all the 80-20, 80-15-5 loans around that avoided PMI, and could also be done with little or no documentation. Those loans aren't around any more, so the only choice is often FHA. Also, on conventional loans, the rate used to be the same down to a 620 credit score. This is certainly not the case any more. Even a score of 739 these days can have a hit to pricing on a conventional loan. Seller, and ovbiously agents, based on your other question, need to be re-educated about the new world of mortgages.