For such a short question, this really opens a number of different ways to respond. In a quick response, you could just say “yes, there are differences in the appraisal requirements” but theoretically, they both have the same function and appraisal is supposed to be a fairly standard process. Both appraisals are designed to determine a value based on one of three different approaches; the income approach, the replacement value approach and the market data comparison approach. The income approach is really only valid for income producing properties and so this method is all but ignored on a residential appraisal. Additionally, the replacement value approach is great to determine how much insurance you might need, but of little value to lenders and most borrowers for anything else. So appraisers and lenders concentrate almost exclusively on the market data comparison approach which consists of comparing your home to others in your area that have sold, making adjustments for differences and determining a value based on what the known willingness of buyers is to pay for similar homes in that area and then trying to adjust for differences from house to house.
The FHA (reverse mortgage) appraisal and the conventional appraisal both use the same sales and so they are alike in that respect, but then they do differ based on the rules the appraisers have to follow and the method by which the appraisal is delivered. Appraisers must perform many more inspections for FHA/reverse mortgage appraisals than most appraisers do with a conventional loan. They must do a head and shoulders inspection of the attic space, they are supposed to check the cabinets to see that they are in working order and turn on and off the water in each location among other things. FHA appraisers must call out things that HUD requires to be repaired and then reinspect the home to be certain they are completed prior to the loan closing such as chipping and peeling paint, earth to wood contact and health and safety issues that might go unmentioned on a conventional appraisal or merely mentioned as a side-note.
The FHA reverse mortgage appraisal is also delivered directly to HUD as well through the electronic portal set up by HUD. Lenders must log the appraisal when it is ordered and the appraiser sends it to HUD through the electronic portal so HUD has the appraisal even before the lender receives it. Conventional appraisal reports go straight to the lender who ordered the appraisal. This doesn’t usually create delays of more than 24 hours, but it can. Ideally both appraisals will take into consideration the same factors and the value should be very similar (keep in mind that an appraisal is an estimate of value on a given day in time so estimates can vary based on appraiser, which sales they considered and the date of the assignment). Lenders and especially their licensed loan officers can no longer dispute a value or even discuss values with appraisers after appraiser independence rules were adopted by various states, federal laws and HUD, FHLMC and FNMA. If an appraiser feels that he/she is being pressured in the appraisal process, they have several ways to report the undue influence. Borrowers can still dispute a value estimate once given by an appraiser, but only by using specific data that they feel the appraiser may have missed or mistakes the appraiser may have made. But then those borrowers have to provide specific evidence of their assertions (i.e. other houses the appraiser did not use in the report that the borrower feels the appraiser missed that are more similar, are closer and sold more recently than the sales the appraiser used).
One way in which the two appraisals are similar but can be different in the way they turn out is this comparison and adjustment process. Both HUD and conventional sources have rules about how much a comparable sale (comps) may be adjusted and still be considered comparable. But HUD is more strict in that they do not allow what they determine to be “subjective” adjustments. If the appraiser feels that an adjustment to the value is warranted, he/she must be able to support that adjustment with sales data. In other words, if the appraiser believes that a house with a 3 car garage is worth $2,000 more than a house with a 2 car garage, HUD expects that appraiser to have at least one comp that sold with a 3 car garage supporting that $2,000 difference. This is especially true with outbuildings and other differences that are not as easy to quantify as a bathroom or a bedroom might be (but even then, if you have a 2 bedroom home, you cannot use all 3 bedroom comps and try to adjust for the difference because HUD believes there is no way to know the true value or the marketability of the home if there are no other 2 bedroom sales available).
One last difference to note here is that because of the added level of detail and inspections required, most FHA/reverse mortgage appraisals tend to cost more than conventional appraisals. Because reverse mortgage appraisals must be performed by an FHA-approved appraiser, in some areas there may be a severely limited number of appraisers eligible to provide the service. In those instances, the appraisals may take a lot longer, appraisers may have to come from other areas to complete the report and the costs may be higher.