For what reasons may an appraiser receive a Notice of Deficiency (NOD) from FHA?

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

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-04395