An appraisal is required for ____________.

An appraisal is particularly required for an FHA loan because this type of financing is backed by the Federal Housing Administration, which mandates that properties meet specific health and safety standards as part of the underwriting process. The appraisal not only assesses the value of the property but also ensures that it meets these essential criteria, protecting both the lender and the borrower.

In the case of conventional loans, while an appraisal is often required, it is not mandated by the government and can sometimes be waived based on the borrower's qualifications and the lender's policies. A cash purchase typically does not require an appraisal since there is no lender involved; the buyer pays the seller directly. Personal loans, being unsecured loans, do not involve property valuations, thus appraisals are not necessary.

This distinction is crucial, as it highlights the specific requirements that different financing mechanisms entail, particularly with government-backed loans.