An FHA appraisal does two things: It checks the home’s value and confirms whether the property meets FHA requirements.
The appraiser reviews the home’s market value and looks for visible issues that could affect safety, structural soundness or livability.
FHA Appraisal Requirements Basics
| Checklist Area |
What The Appraiser Looks For |
Common Issue |
| Value |
Comparable sales, property condition and market support |
Appraised value below the purchase price |
| Structure |
Foundation, roof, walls and visible stability |
Major cracks, leaks or signs of settlement |
| Systems |
Heating, electrical, plumbing and water service |
Utilities off or systems not working |
| Safety |
Safe access, exits, stairs, railings and local alarm requirements |
Missing handrails, unsafe steps or blocked egress |
| Environmental Concerns |
Peeling paint, water intrusion, pests and visible hazards |
Deteriorated paint, mold concerns or active infestation |
What FHA Appraisers Must Review
An FHA appraiser provides an opinion of value and reviews the property for FHA acceptability.
The home must generally meet FHA standards for safety, soundness and security.
For buyers, the appraisal helps confirm whether the property supports the loan amount. For lenders, it helps determine whether the property is acceptable collateral for FHA mortgage insurance.
HUD also publishes minimum property standards for buildings constructed under HUD housing programs, including new single-family homes.
FHA Appraisal vs. Home Inspection
An FHA appraisal is not a full home inspection.
The FHA appraiser reviews visible property conditions and reports issues that may affect FHA eligibility. A home inspector performs a more detailed condition review for the buyer.
You can still order an independent home inspection even after the FHA appraisal is complete.
Roof And Exterior Condition
The roof should protect the home from moisture and should not show obvious signs of failure.
Common roof issues include:
- Missing shingles
- Active leaks
- Damaged flashing
- Visible daylight in the attic
- Water stains on ceilings
The appraiser may call for further inspection if the roof condition cannot be determined from a visual review.
Exterior issues can also create appraisal conditions. These may include peeling paint, exposed wood, broken windows, unsafe steps, trip hazards, damaged siding or drainage problems near the foundation.
Structural And Foundation Standards
The foundation and structure should not show visible signs of serious instability.
Potential concerns include:
- Large horizontal cracks
- Stair-step cracking
- Visible settlement
- Sloping floors
- Water intrusion
The FHA appraiser does not perform an engineering inspection. If a visible concern exists, the lender may require a qualified professional to evaluate and document the issue.
Wood-Destroying Organisms
Termite damage, wood rot or other wood-destroying organism concerns can delay closing if the issue appears active or structurally significant.
Treatment, repairs and documentation may be required before the loan can close.
Heating, Electrical And Plumbing Systems
The home must have major systems that support safe occupancy. The appraiser typically checks whether utilities are on and whether the main systems appear functional.
Heating And Cooling
The home must have a safe and functional heat source when required for the local climate.
Central air conditioning is not required in every home. However, if the system exists and contributes to the property’s value, a nonworking system may be flagged.
Electrical Safety
Electrical issues that may require repair include:
- Exposed wiring
- Missing outlet covers
- Unsafe panels
- Overloaded conditions
- Rooms without power
Local code requirements may also affect what needs to be repaired.
Plumbing And Water
The home should have working hot and cold water, functional fixtures and no obvious active leaks.
Common concerns include failed water heaters, visible mold around plumbing, sewer problems or water damage.
Safety Features And Access
FHA appraisal standards include basic occupant safety.
The appraiser may review:
- Stairs
- Decks
- Porches
- Handrails
- Doors
- Windows
- Exits
- Access to living areas
Smoke alarms and carbon monoxide alarms should comply with local requirements. Missing or nonworking devices may need to be corrected before closing.
Lead-Based Paint And Environmental Issues
Older homes may raise lead-based paint concerns when paint is peeling, chipping or deteriorated.
Other visible environmental concerns may include mold, water intrusion, pest activity or conditions that appear unsafe for occupancy.
The appraiser may require repairs or additional inspection if the issue affects the property’s safety, soundness or security.
Property Type Considerations
FHA requirements can vary by property type.
Condos
Condos may need FHA project approval or single-unit approval before the loan can move forward.
Manufactured Homes
Manufactured homes must meet HUD requirements, including foundation-related standards.
Two- To Four-Unit Properties
For two- to four-unit homes, each financed unit must support safe occupancy. Utilities, access and living areas should be functional and compliant.
How To Prepare For An FHA Appraisal
You can reduce the risk of delays by preparing before the appraiser visits.
Before the appraisal:
- Turn on all utilities
- Complete obvious safety repairs
- Make attics, crawl spaces, garages and mechanical rooms accessible
- Replace missing smoke or carbon monoxide alarms if required locally
- Gather permits, receipts and contractor invoices for completed work
- Address peeling paint, broken windows, unsafe steps and visible leaks
If known problems exist, addressing them before the appraisal can help avoid a repair condition and a follow-up inspection.
What Happens If The FHA Appraisal Flags Repairs
If the appraiser identifies required repairs, the lender decides what must be completed before closing.
Repairs may require:
- Photos
- Receipts
- Contractor invoices
- Permits
- A final inspection
If the appraisal value comes in below the contract price, you may be able to renegotiate with the seller, bring additional funds if allowed or request a reconsideration of value when supported by stronger comparable sales.
How Long An FHA Appraisal Is Valid
For most FHA Title II forward mortgages, the initial appraisal validity period is 180 days from the effective date of the appraisal report. HUD Mortgagee Letter 2022-11 also extended the appraisal update validity period to one year and removed the optional 30-day extension.
The Bottom Line
An FHA appraisal is both a valuation step and a property review. The appraiser estimates the home’s market value and checks for visible issues that may affect FHA eligibility.
The best way to reduce delays is to address obvious safety, structural, system and access issues before the appraisal appointment.
Frequently Asked Questions
What Is Included In An FHA Appraisal?
An FHA appraisal includes a market value opinion and a review of visible property conditions that may affect safety, soundness and security.
Is An FHA Appraisal The Same As A Home Inspection?
No. An FHA appraisal is used for valuation and FHA property acceptability. A home inspection is a more detailed condition review for the buyer.
How Long Is An FHA Appraisal Valid?
For most FHA Title II forward mortgages, the initial appraisal validity period is 180 days from the effective date of the appraisal report.
Does The Seller Have To Fix Everything In The FHA Appraisal?
Repairs required for FHA eligibility usually must be resolved before closing. Who pays for those repairs is negotiated between the buyer and seller.
What Happens If An FHA Appraisal Comes In Low?
You may be able to renegotiate the price, bring additional funds if allowed or request a reconsideration of value if better comparable sales support a different value.
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