What Won´t Pass FHA Inspection

What Won’t Pass FHA Inspection

There are some issues detected during an FHA inspection that definitively we include in a list of what won´t pass an FHA inspection. This FHA inspection is key to fulfill all the FHA loan requirements.

These are issues included in the law, such as the violation of the peeling paint guidelines and others that come from practice that makes FHA inspections harder to pass than conventional loan appraisals.

Peeling Paint In Houses Built Before 1978

It is assumed that these houses have lead-based paint. Therefore, if there is peeling paint present, it would violate these FHA peeling paint guidelines.


The roof must be sturdy enough to reasonably last two to three years and it must keep moisture out. In addition, the roof cannot have more than three layers. If it does and the inspectors find enough damage, they would require a new roof.

Structure Quality

The overall structure of the property must be in good enough condition to keep its dwellers safe. This means severe structural damage, leakage, dampness, decay, or termite damage can cause the property to fail the FHA inspection. In such a case, repairs must be made in order for the FHA loan to move forward.

Heating And Water

Each inhabitable room must have an adequate heating source. However, certain exceptions apply in areas that experience mild winters. In addition, the water heater must adhere to local building codes.

Electrical Installations

Furthermore, electric boxes cannot have damaged or exposed wires. No aluminum wiring, or at least it has to be pigtailed by a professional, as it is explained here.

Safety Hazards

An appraiser would inspect the property for potential safety hazards such as asbestos. In the event that the inspector finds asbestos that may be damaged, an asbestos expert must conduct another examination.

Asbestos has to be removed completely, which comes at a high cost.

Some hazards are not obvious such as contaminated soil.


The property may not pass inspection if it sits in an area that’s too noisy or within proximity to a hazardous waste site, as defined by the federal government. We list a few area-specific nuisances that may prevent a home from passing FHA inspection:

  • Heavy traffic
  • Proximity to an airport, high-voltage power lines, radio or TV transmission towers
  • Relation to a high-pressure petroleum line and other sites with potential for explosion
  • Proximity to different sources of excessive noise
  • Oil and gas sources on property


To pass inspection, the home must provide access to pedestrians and vehicles, particularly emergency vehicles. These must be able to access the home under all weather conditions.

This is an overview of what issues an FHA inspector looks for. For a complete guide, access the Department of Housing and Urban Development’s Homeownership Center (HOC) Reference Guide.

FHA Appraisal Red Flags

  • No structural deficiencies in the foundation, framing, or roof. 
  • The basement must be dry and lot must provide positive drainage away from perimeter walls of the dwelling.
  • All mechanical systems (plumbing. heating, and electrical) must be operating at the time of inspection and be suitable for the home.
  • All utilities must be on and operable.
  • Electrical and plumbing must be updated.
  • Heat sources must be permanent and fired by gas, propane, oil, or electric.  Wood can only be used as a back up.
  • Lead base paint – Correct all pealing defective paint surfaces for homes built before 1978.  This includes the entire interior and exterior of dwelling, as well as attached and detached garages, barns, fences.
  • Exterior wood surfaces must be rot free.
  • Smoke and Carbon monoxide detectors must be present. 
  • Any broken or missing fixtures must be repaired or replaced.
  • Handrails must be in place in all stairwells or steps on the interior and exterior of the dwelling, where required for safety purposes.

See our more detailed list of FHA appraisal red flags here.

FHA Appraisal Re-Inspection

An FHA re-inspection is required when 180 days have passed and the operation did not close, or if there are issues that will not pass an FHA inspection, as we explain here in a bit more detail.

All government-backed loan programs have specific appraisal and inspection guidelines that usually exceed what is typically required in a conventional mortgage loan. 

Any required repairs for an FHA loan should be about bringing the property up to FHA Minimum Property Requirements (MPR) so the property can be guaranteed a loan by HUD. The appraiser acts as the eyes of the lender and the eyes of the HUD.

If the appraiser notes any of the issues that won´t pass FHA inspection, the appraisal is then completed subject-to repairs or re-inspection. 

Once those repairs are complete, the appraiser is called back out to verify that the home now meets the guidelines.

While the underwriter can overrule the re-inspection, the client will want to ensure that the required repairs are performed, so will arrange a reinspection in any case.

The appraiser has to perform the reinspection and cannot verify repairs were completed simply by someone else photos. If the client hired the appraiser to go back to the property after the necessary repairs were allegedly performed, he has to go. An appraiser will not sign something that was not seen in person.

That is the reason why in the real estate industry we usually think that the appraiser is behaving weirdly about the reinspection, but he simply has instructions from the client and also, represents the interests of the FHA in that reinspection.

FHA appraisals are good for up to 180 days. In some instances, an appraiser can recertify the value if they agree to do so before the original appraisal expires.

The prospective buyer is interested that the inspection takes place as required by law, in order to continue with the next stages until closing. The seller, instead, can sell the real estate residential object to any party, even those without FHA mortgages.

However, sometimes the seller cannot prepare the property for an FHA inspection because he does not know that the prospective buyer can require an FHA loan.

FHA Home Inspection Checklist PDF

For an understanding of what won´t pass FHA inspection, please refer to this PDF HUD document which is an official document and kind of a guide for FHA home inspections, a checklist.

If you require each item explained, you can refer to our FHA appraisal and inspection guidelines.

FHA Inspection Form

In this FHA inspection form, there is no clear guidance on what issues will not pass the FHA inspection, but it will serve as a reference for the documents used.

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