FHA Appraisal Requirements: What to Fix Before the Appraiser Arrives

If you are buying or selling a home using FHA financing, it is important to understand that an FHA appraisal is not the same as a conventional appraisal. The appraiser has two jobs: determine the market value of the property and confirm that the home meets HUD's Minimum Property Requirements (MPRs). If the property doesn't meet those requirements, the appraiser is required to call them out — and those items typically must be repaired before the loan can close.

The good news is that many of the most common FHA flags are inexpensive and easy to address if you know what to look for ahead of time. Getting ahead of these items before the appraiser arrives can save you from a second inspection visit — and the additional fee that comes with it.

Here are the most common issues we see in the field.

1. Water Heater Not Strapped

In Washington State and most western states, FHA requires that water heaters be double-strapped to the wall to prevent tipping in the event of an earthquake. This is one of the most common flags we see and one of the easiest fixes. If your water heater isn't strapped — or only has a single strap — have a plumber or handyman address it before the inspection. It's typically a minor job and inexpensive to correct.

2. Missing Smoke or Carbon Monoxide Detectors

FHA requires working smoke detectors on every level of the home, including the basement, and outside every sleeping area. Carbon monoxide detectors are also required in homes with gas appliances, attached garages, or any fuel-burning heat source.

Walk through your home before the inspection and test every detector. If any are missing, battery-only units are acceptable — you don't need hardwired detectors to satisfy the requirement. This is one of the cheapest and fastest fixes on this list.

3. Peeling or Chipping Paint

This is one of the biggest sources of FHA appraisal surprises, because peeling paint can be flagged anywhere on the property — not just inside the home. FHA takes peeling paint seriously due to the potential for lead-based paint exposure, particularly in homes built before 1978.

Before your inspection, do a thorough walkthrough of:

• All interior walls, ceilings, and trim

• Exterior siding and trim

• Decks, railings, and steps

• Fences

• Detached garages and sheds

• Any outbuildings on the property

If you see peeling, bubbling, or chipping paint anywhere, scrape it, prime it, and repaint it before the appraiser arrives. Don't assume a small patch in the back corner of the fence won't get noticed — if it's visible, it's fair game.

4. Bare or Untreated Exterior Wood

Any exposed wood on the exterior of the property must be painted, stained, or otherwise treated to protect it from moisture and deterioration. FHA views untreated wood as a property condition issue that can lead to accelerated deterioration and pest intrusion.

Check all of the following:

• Deck surfaces, posts, and framing

• Fences

• Exterior siding

• Fascia and trim boards

• Outbuildings and sheds

• Any raw wood added during recent repairs or construction

Even if the wood looks fine structurally, bare untreated wood is a flag. A coat of exterior stain or paint is all it takes to satisfy the requirement.

5. Rotted Wood

Visible rotted wood anywhere on the property is an FHA flag and will need to be repaired or replaced before the loan can close. While appraisers are not home inspectors and won't be probing siding with a screwdriver, if the rot is visible, it will be noted.

The most common places we find it:

• Deck boards, posts, and railings

• Fascia and soffit boards

• Window sills and trim

• Exterior siding, particularly at the base of walls near grade

• Steps and stair stringers

• Sheds and outbuildings

When in doubt, have a contractor take a look before the inspection. Replacing a few rotted boards is far less disruptive than a repair requirement that holds up your closing.

6. Deck Railings and Fall Protection

FHA requires guardrails on any deck, porch, or elevated walking surface that is 30 inches or more above grade. The generally accepted standard for railing height is 36 inches for residential decks, though some jurisdictions require 42 inches — check your local building code to confirm what applies in your area.

If your deck has no railing, a railing that is too low, or a railing with spindle spacing wide enough for a small child to pass through, it will likely be flagged. This is a repair worth addressing before the inspection, as deck railing work can take time to schedule with a contractor.

7. Standing Water or Moisture in the Crawl Space

FHA requires the appraiser to inspect both the crawl space and the attic. The appraiser likely won't fully enter either space, but they will access the opening, look inside, and take photographs. What they are looking for — particularly in the crawl space — is evidence of moisture intrusion, standing water, or inadequate ventilation.

Standing water in a crawl space is an automatic flag and will need to be remediated before the loan can close. Even if the water has dried up, visible staining, efflorescence on the foundation walls, or a strong musty odor can raise questions.

If you know your crawl space has had moisture issues, address it proactively:

• Clear any standing water

• Check that vapor barrier is in place and in good condition

• Ensure crawl space vents are open and unobstructed

• Consider a dehumidifier if moisture is an ongoing issue

  
  

8. Vegetation Touching the House

FHA has strict concerns about moisture intrusion and pest access, and large shrubs, bushes, or tree branches that make direct contact with the home are considered a risk for both. This is more common than people expect — overgrown foundation plantings on the side or rear of a home are easy to overlook until someone is specifically looking for them.

Before the inspection, walk the full perimeter of the home and trim back any vegetation that is:

• Touching or growing against the siding

• Overhanging the roof line and making contact

• Covering or obscuring the foundation

• Pressing against windows, vents, or utility penetrations

A few hours with a pruner can take care of most of this and it's one of the easiest items on this list to address.

9. Wood-to-Soil Contact

Wood that is in direct contact with soil is one of the more common FHA flags in the Pacific Northwest, and it's easy to miss if you aren't specifically looking for it. When wood meets soil, moisture absorption accelerates rot and creates an ideal entry point for wood-destroying insects — both of which FHA specifically wants to avoid.

The most common places we find it:

• Deck posts sitting directly on or near grade

• Siding that extends down to or below the soil line

• Stair stringers that contact the ground

• Fence posts where the surrounding soil has built up over time

• Wood framing on outbuildings or sheds at grade level

The fix is usually straightforward — pulling soil back away from the wood to create clearance, adding a concrete footing, or in some cases replacing the affected section. FHA generally wants to see a minimum of 6 inches of clearance between wood framing and the ground. Walk the perimeter of your home and any outbuildings with that standard in mind.

10. Missing or Non-Compliant Handrails on Interior Stairways

Any interior stairway with four or more risers is required to have a handrail under FHA guidelines. This catches a lot of homeowners off guard, particularly in older homes where handrails were never installed or were removed during a renovation.

Beyond simply being present, the handrail needs to be:

• Securely mounted — a wobbly or loose handrail that isn't firmly attached to the wall will be flagged

• Continuous along the full run of the stairs

• Graspable — meaning it has a profile a person can actually grip, not just a flat top rail

If you have an open staircase with a decorative newel post system but no wall-mounted handrail, check with your contractor about what's needed to meet the requirement. This is one that often surprises sellers during the appraisal process.

Other FHA Items Worth Knowing

In addition to the items above, here are a few more FHA flags that come up regularly:

• Roof condition — FHA requires the roof to have at least two years of remaining useful life. Visibly failing roofs, missing shingles, or evidence of active leaking will be flagged.

• Broken or inoperable windows — Windows that are broken, painted shut, or missing are a flag, particularly in sleeping rooms where egress may be a concern.

• Inoperable heating system — The home must have a functioning heat source capable of maintaining 50°F in all living areas.

• Exposed electrical wiring — Any visible open wiring, missing outlet covers, or double-tapped breakers visible at the panel may be flagged.

• Evidence of active pest infestation — Visible termite damage, rodent activity, or evidence of wood-destroying organisms will typically require a pest inspection.

• Safety hazards — Anything the appraiser deems an immediate safety hazard — an unstable porch, a broken stair, an open floor void — is subject to a repair requirement.

A Note on Re-Inspection Fees

If the appraiser identifies required repairs during the initial inspection, those repairs must be completed and verified before the loan can close. In most cases, that means the appraiser must return to the property to confirm the work was done — and that re-inspection comes with an additional fee, typically charged to the buyer or seller depending on the purchase contract.

Getting ahead of the items on this list before the appraiser's first visit is the single best way to avoid that cost and keep your closing on track.