How strict are FHA appraisal and property requirements, and could they kill my deal?
The short answer
FHA appraisals are a little stricter than conventional ones: the appraiser checks that the home is safe, sound, and secure, and flags things like peeling paint on older homes, a failing roof, or broken utilities. Most items are small and can be fixed before closing, and they rarely kill a deal when they're caught early. The Mortgage Advisory helps buyers and their agents plan for FHA repairs before the offer, not after the appraisal.
What is the FHA appraiser looking for?
Two things: the home's value, and whether it meets FHA's minimum property requirements, which boil down to safe, sound, and secure. The appraiser isn't a home inspector, but they will note conditions that affect health, safety, or the home's structure.
What commonly gets flagged?
- Peeling or chipping paint on homes built before 1978 (a lead paint concern)
- A roof near the end of its life or with active leaks
- Utilities that don't work: water, heat, and electricity should be on and working
- Exposed or unsafe wiring, missing covers, or other obvious hazards
- Broken windows or doors, or missing handrails where there's a real safety risk
- Water damage, active leaks, or structural problems like foundation cracks
- Crawl space or attic access the appraiser can't get to
Could it kill my deal?
Rarely, if you plan ahead. Most flagged items are small: scrape and paint, fix a railing, turn on a utility. The seller usually makes the repairs before closing, and the appraiser comes back to confirm. Big problems like a failing roof or foundation can be deal-breakers, but those usually show up in the home inspection first.
How do I avoid surprises?
- Tell your agent you're using FHA before you write offers, so they can spot likely issues on showings.
- Get a home inspection and compare it with FHA's standards.
- Write the offer so the seller agrees to FHA-required repairs, up to a set amount.
- Skip homes that need major work, or look at a renovation loan instead.
Example scenario (illustrative)
A first-time buyer in Fort Collins makes an FHA offer on a 1965 ranch home. The appraisal flags peeling paint on the trim and a missing handrail on the back steps. The seller spends a weekend and about $600 fixing both, the appraiser signs off, and the loan closes on time.
Our take
FHA's reputation for "killing deals" is mostly outdated. The requirements protect you too: nobody wants to move into a home with a failing roof. We arrange FHA loans through approved partner lenders, and I'll talk with your agent early so repairs are handled in the contract, not discovered the week before closing.
Sources
Ace Ausar, Mortgage Banker · NMLS #1143018
The Mortgage Advisory, Inc. · NMLS #1549739
Reviewed by Ace Ausar, NMLS #1143018 · Updated
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