Why is the FHA appraisal check list so stringent?

For two reasons: because the FHA wants to protect themselves against bad properties, and because the FHA wants to protect you in case you don't know what you are doing (after all, isn't that the job of the government these days - to tell you what's best for you like a child?). I give more emphasis on the first reason, but I digress. The FHA was created for people that can't afford to buy a home under typical lending guidelines. That means they are uming more risk than normal, so the rates of default are higher than normal, so they want to be sure that the property can be reasonably resold in Foreclosure. I wonder if they are just uming that will happen. Hense, they have high standards for the property so they can recoup the loan amount. Also, home owners have been known to sue the lender for making a loan on a bad property (like a home with window bars; if the house burns down, and a child is trapped by the bars and dies, the lender may get sued for making the loan on a bad property - see what the world has come to? See reason #2 above).