Our experience was also with an FHA loan for a 100 year old row house in Parkview, in Dec. 2010. It had been renovated maybe a decade or two ago and was in sort of sorry shape (a foreclosure that had seen better days, needed updates and repairs). In terms of condition, it had no kitchen (which was not an issue at all), a hideous bathroom, some evidence of small roof leaks, and evidence of past basement flooding. The only thing we had to do was make two small repairs at our own expense before closing – 1) there was a hole punched through one plaster wall that had to be re-plastered and 2) ceiling plaster around a stack pipe had failed and needed to be repaired. Otherwise, it was deemed livable. After that, it was smooth sailing!