No the home doesn't have to be in excellent condition but it must be in good condition and all of the major items working (ie roof, a/c, etc)

 

Here is a list of the FHA Loan Qualifications

 

You will need to have 2 years of steady employment. Not necessarily by the same employer but it is preferred.

Your income should be similar or increasing for the past 2 years.

You should have less than two 30 day periods of late payments on your credit reports.

If you have declared bankruptcy, then it must be at least 2 years old and you will have to have good credit since then.

Foreclosures will also need to be older than 3 years and have good credit since then.

Mortgage payment should be about 30% of your gross income.