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HUD has implemented a program called the Homebuyer Protection Plan. There are six key elements to the program:

1. A consumer education campaign about the difference/importance of both appraisals and inspections.

2. Mandatory testing of all appraisers to determine if they are qualified to perform FHA appraisals.

3. Requirements for more thorough and reliable appraisals to uncover significant defects in the home.

4. Mandatory disclosure of detected home defects to homebuyers.

5. Automated evaluation of appraisals.

6. Stricter enforcement action to suspend poorly performing appraisers from working for FHA.

In addition, under the new initiative homebuyers will be required to sign and date a new informational form before they purchase a home with a FHA mortgage. The real estate professional is required to provide the form upon presentation of the purchase contract. The form advises the homebuyer to get a home inspection in addition to the appraisal. A home inspection remains vitally important for the homebuyer even with the improvements made in FHA appraisals.

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