FHA inspections (technically appraisals) are generally not hard to pass if a home is safe, secure, and structurally sound. They focus on habitability, requiring functional heating, plumbing, and electrical systems, and the absence of major health/safety hazards like peeling paint or roof leaks. Most homes pass, but major issues must be repaired before closing.
Major structural issues that are common FHA red flags include cracked or crumbling foundations, deteriorating roofs, and water damage. Other red flags that appraisers look for include: Missing handrails. Cracked windows.
FHA Appraisal Checklist
The requirements for FHA and VA aren't that strict. You need a heater, running water, no obvious safety issues and no habitability issues. I've done thousands of these transactions and less than 1% have corrections. It's important to note that a home won't fail the inspection.
FHA appraisal and inspection checklist
Must have an undamaged exterior, foundation and roof. Must have safe and reasonable property access. Must not contain loose wiring and exposed electrical systems. Must have all relevant utilities, including gas, electricity, water and sewage functioning properly.
FHA loan disqualifications often stem from a poor credit history (especially recent bankruptcies/foreclosures or delinquent federal debt), a high debt-to-income (DTI) ratio (over 43-50%), or insufficient funds for down payment/closing costs, plus issues like having an existing FHA loan without proper justification or the property not meeting FHA standards. Resolving delinquent federal debts (student loans, taxes) is crucial, and a score below 500 generally disqualifies you, though most lenders prefer 580+.
Top reasons homes fail inspection
Foundation flaws such as cracks, troublesome tree roots and uneven settling or lack of steel reinforcement. An aging, damaged or deteriorating roof. Missing flashing or shingles. Damaged siding.
It will take about two to four weeks to schedule and complete the FHA inspection and appraisal of the home, though the inspection itself will only take a couple of hours. The FHA has strict standards when it comes to the condition of the property you are purchasing with the loan.
As long as the home you want to buy doesn't have major safety, security or soundness issues, it will likely pass the FHA appraisal.
Denial rates vary by loan type, though. FHA loans had a higher denial rate at 13.6%, while conventional conforming loans had the lowest at 7.9%, showing some variation depending on the program you choose. Refinance applications tend to have higher denials, with an overall rate of 32.7% in 2023.
Isn't a passing inspection required to get a mortgage? Nope—and the truth is, while home inspections are highly recommended, they're not typically required. An appraisal, however, is required before you can get a mortgage from the bank, and if a home is in poor condition, it won't appraise high.
Deep Clean Every Room
A clean home is essential to make a strong impression on visitors. Even minor dust or grime can be a major turn-off during an inspection. Focus on High-Use Areas: Kitchens and bathrooms should be spotless. Deep clean countertops, appliances, sinks, toilets, and showers.
The 5 Most Common Issues Found During a Home Inspection
A home inspection can detect safety issues like radon, carbon monoxide, and mold, which all homes should be tested for. 2 Make sure that your home-buying contract states that should such hazards be detected, you have the option to cancel the offer to buy.
The FHA 85% rule refers to a past guideline for cash-out refinances limiting the loan to 85% Loan-to-Value (LTV) and a specific rule for identity-of-interest transactions (like buying from family) where borrowers couldn't finance more than 85% of the home's value unless exceptions applied, such as renting from the family member for at least six months prior. While the general cash-out LTV is now 80%, the 85% rule still applies to certain related-party sales, requiring a 15% down payment unless an exception is met, notes FHA.com.
The top five things home inspectors evaluate