With easier credit requirements, lower down payments, and flexible guidelines, FHA loans are a popular entry point for many first-time buyers. But they come with one extra step that can impact your purchase: the FHA inspection, technically known as the FHA appraisal.
Most buyers will get a standard home inspection to understand a home’s condition and uncover any underlying problems. But an FHA appraisal inspection serves two distinct purposes, meant to protect both the lender and future occupant: It verifies the home’s value and confirms the property meets federal Housing and Development (HUD) Minimum Property Requirements (MPRs).
In other words, if you’re buying with an FHA loan, the home must be safe, structurally sound, and free of hazards that could affect an occupant’s health. Does that mean your dream home is off-limits? Not necessarily.
Whether you’re buying your first home in Atlanta, GA or looking at houses for sale in Riverside, CA, make sure you know won’t pass an FHA inspection — before it comes time for the appraisal.
>>See more: FHA Inspection Requirements
In this article:
How FHA inspections work
Why would a house not pass FHA inspection?
FHA appraisal red flags
What happens if a home doesn’t pass
Is it hard to pass an FHA appraisal?
FAQs
How FHA inspections work
Before jumping into FHA appraisal red flags, it’s helpful to understand how the process itself works. The FHA inspection goes hand-in-hand with the FHA appraisal, taking place when an FHA-approved appraiser visits the property. During this visit, the appraiser is verifying two things:
1. The home’s fair market value
They assess comparable sales, the home and property condition, and features to make sure the lender isn’t financing more than what the home is worth.
2. The home meets HUD’s Minimum Property Requirements
This is the “inspection” part. The appraiser checks for:
- Safety hazards like exposed wiring, missing…