A Notice of Deficiency (NOD) refers to a formal notification from FHA to an appraiser when a review identifies gaps in due diligence and professionalism or errors or noncompliance. FHA will provide the appraiser with written notice outlining deficiencies found in a specific appraisal. An NOD is not a sanction and is not considered severe enough to require remedial education or removal. No appeal is available. An NOD is noted on the Appraiser’s record and multiple NODs may result in further action by FHA.
For additional information see Handbook 4000.1 V.E.5.e.i(A) at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh