What Fails an FHA Appraisal? The Complete 2026 Checklist

What Fails an FHA Appraisal? The Complete 2026 Checklist

Most people asking this question are worried about the wrong things. They're anxious about a dated kitchen, worn carpet, or a bathroom that hasn't been touched since the nineties — none of which will fail an FHA appraisal. Meanwhile the actual dealbreaker is often a $200 handrail nobody thought about.

An FHA appraiser evaluates the property against HUD's Minimum Property Requirements: the home must be safe, sound, and secure. That's the entire test. This checklist walks the property the way an appraiser does, so you know exactly which items matter.

One framing note first: an FHA appraisal doesn't really "fail." When a property doesn't meet MPR, the appraisal is issued subject to repairs — the value stands, conditioned on specified work being completed and certified on a Form 1004D before the loan can fund.

Before the appraiser arrives: the non-negotiables

These will waste the trip entirely and cost you a return-visit fee plus days on the calendar:

• All utilities on and testable. Power, water, and gas must be live. An appraiser cannot certify that a furnace, water heater, or plumbing system works if it can't be turned on. This is the single most common wasted appraisal visit.
• Full access to every area. Attic access, crawl-space access, the electrical panel, the water heater, the furnace, and the garage all need to be reachable. Move the boxes.
• Pets secured and the property accessible at the scheduled time.
• The home substantially complete. No active gut-renovation in progress.

Exterior checklist

Fails or gets conditioned:

• Peeling, chipping, or flaking paint on any painted surface of a pre-1978 home — including exterior siding, trim, soffits, garages, sheds, fences, and detached structures
• Missing, lifted, or damaged roof shingles; visible sagging; a roof clearly at end of life
• Deteriorated flashing, missing or damaged gutters causing water intrusion
• Grading that slopes toward the foundation; standing water against the house
• Missing guardrails on elevated decks, porches, balconies, and landings
• Missing handrails on exterior stairs with a meaningful rise
• Rotted deck framing, stair treads, support posts, or railings
• Broken or missing windows; doors that don't latch or lock
• Foundation cracks suggesting active movement; visible displacement
• Exposed exterior wiring, damaged service entrance, missing weatherproof covers on exterior outlets
• Unsafe or absent all-weather access to the property
• Empty or unsecured in-ground pools and other attractive hazards
• Debris, junk, or conditions creating a health or safety hazard

Passes as-is:

• Faded but intact paint
• Worn but functional driveway and walkway surfaces
• Overgrown or unattractive landscaping
• Cosmetically dated siding in sound condition
• Minor settlement cracks with no evidence of movement

Roof: the specific standard

FHA expects the roof to prevent moisture entry and to have reasonable remaining economic life — commonly framed as two years or more. Active leaks, daylight visible through sheathing, water staining in the attic, and widespread shingle failure will be conditioned. Where a roof already carries multiple existing layers and is failing, replacement rather than patching is often required.

Interior checklist

Fails or gets conditioned:

• Peeling or chipping interior paint on pre-1978 homes, including inside closets, on window sills, and on trim
• Exposed or frayed wiring, open junction boxes, missing outlet and switch cover plates
• Missing GFCI protection in kitchens, bathrooms, laundry areas, garages, and exterior locations
• Non-functioning outlets or light fixtures in living areas
• Inoperable heating system; inadequate heat for the climate; unvented fuel-burning heaters or space heaters as the primary heat source
• Non-functioning or improperly vented water heater; missing or improperly terminated temperature and pressure relief discharge line
• Active plumbing leaks; non-functioning fixtures; no hot water
• No functioning bathroom, kitchen sink, or toilet
• Significant floor deflection, soft spots, or evidence of structural failure
• Visible active mold growth or ongoing water intrusion
• Missing interior handrails on stairways with a meaningful rise
• Inoperable or missing smoke detection where required by local code
• Bedrooms without required egress
• Evidence of active pest infestation or termite damage
• Unfinished areas where flooring, fixtures, or systems were never completed

Passes as-is:

• Dated kitchens and bathrooms
• Worn carpet, scratched hardwood, scuffed but intact paint
• Old but functional appliances
• Small drywall cracks and nail pops
• Popcorn ceilings and dated light fixtures in working condition
• A single cracked tile or a chipped countertop

Attic, basement, crawl space, and garage

Fails or gets conditioned:

• No safe access to attic or crawl space
• Standing water in a crawl space or basement
• Water staining, active leaks, or evidence of chronic moisture
• Rotted or damaged joists, sills, support posts, or beams
• Inadequate ventilation in crawl spaces
• Exposed wiring or improperly supported plumbing
• Missing fire separation between an attached garage and living space, including a non-compliant door
• Deteriorated garage floor creating a trip hazard, or a non-functioning garage door with a damaged mechanism

Water and sewer

Fails or gets conditioned:

• No continuing supply of safe potable water
• Well water failing bacteria or contaminant testing
• Inadequate separation between well and septic components
• A wellhead that isn't sanitary, capped, and protected from surface water
• Non-functioning septic system; surfacing effluent; failed drain field
• Cross-connection or contamination risks

Note that private water and sewer systems are also where the documentation clock bites hardest. Lab results and health department sign-offs take days regardless of how fast the physical repair happens.

The lead paint rule, stated plainly

If the home was built before 1978 and any painted surface is peeling, chipping, flaking, or otherwise deteriorated, it must be corrected. This applies to interiors, exteriors, and outbuildings.

The correction generally must follow lead-safe work practices, because aggressive dry scraping and sanding of lead paint create hazardous dust — the fix can be worse than the defect if done improperly. This is the most frequently cited FHA repair condition in the country, and the one where hiring the wrong person is genuinely risky rather than just inefficient.

When the appraiser calls for a specialist instead of a repair

Sometimes the appraiser won't require a repair — they'll require a further inspection by a licensed professional. Common triggers:

• Evidence suggesting active structural or foundation movement → structural engineer
• Suspected termite or wood-destroying insect activity → pest inspector
• Questions about a well or septic system → health department or specialist
• Possible roof failure beyond visual assessment → roofing contractor evaluation
• Suspected environmental hazards

This path quietly destroys timelines, because a week can pass before anyone even knows what needs fixing. If your appraisal contains a further-inspection requirement, that's the item to move on first — today, not after the negotiation.

How to prepare a home so it passes the first time

If you're a seller, agent, or homeowner with an FHA appraisal coming:

1. Walk the property looking specifically for peeling paint if it was built before 1978. Interior, exterior, outbuildings.
2. Install every missing handrail and guardrail. Cheapest insurance in real estate.
3. Test every outlet and light, install cover plates, and add GFCI protection in wet locations.
4. Run the furnace and the water heater. Confirm the TPR discharge line exists and terminates properly.
5. Check under every sink for active leaks.
6. Look at the roof and in the attic for staining.
7. Walk the perimeter for grading that drains toward the house.
8. Clear access to the attic, crawl space, panel, and mechanicals.
9. Turn on all utilities and confirm they're live the day before.
10. Secure or fix broken windows and doors.

Almost every common FHA condition is on that list, and almost every item on it costs less than a rate-lock extension.

How AppraisalFix shortens this timeline

The repair itself is rarely the bottleneck — the search is. A homeowner gets a repair list, then starts cold-calling contractors who don't return calls, can't produce insurance certificates, or can't start for three weeks. Meanwhile the rate lock burns.

AppraisalFix was built for exactly this window. We read the appraisal, isolate the lender-required items, match the file to licensed and insured repair professionals already vetted in that market, document the completed work with before/after photos and receipts, and coordinate the 1004D recertification with the original appraiser. If the appraisal has already come back with conditions, we scope specifically against the MPR language on the report — so nothing gets missed and nothing unnecessary gets paid for.

Have an appraisal with repair conditions? Submit the report and we'll return a scoped repair plan with vetted local pros — usually within 24 hours.

Frequently asked questions

Can a house fail an FHA appraisal?

Not exactly. Rather than failing, the appraisal is issued 'subject to' specified repairs. The value stands, but the loan can't fund until those items are completed and certified on a Form 1004D.

Will a dated kitchen or old carpet fail an FHA appraisal?

No. Cosmetic and dated conditions aren't Minimum Property Requirement failures. The test is whether the home is safe, structurally sound, and securable.

Does peeling paint always fail an FHA appraisal?

On homes built before 1978, deteriorated paint must be corrected because of lead-paint risk, and the correction should use lead-safe work practices. On post-1978 homes it's far less likely to be required.

Do utilities need to be on for an FHA appraisal?

Yes. The appraiser needs to verify heating, plumbing, and electrical systems function. If utilities are off, expect a return trip, an additional fee, and days of delay.

How long is an FHA appraisal valid?

FHA appraisals carry a limited validity period — commonly 180 days for most cases. Long repair disputes and re-inspection cycles are the main way files bump against it.

Are smoke detectors required for an FHA appraisal?

Where local code requires them, missing or non-functioning detection can be conditioned. It's an inexpensive item worth handling before the visit regardless.

The bottom line

FHA appraisals fail on safety, soundness, and security — never on style. Deteriorated paint on pre-1978 homes, missing handrails, roof defects, electrical hazards, and non-functioning mechanicals account for most conditions, and nearly all of them can be prevented for a few hundred dollars before the appraiser arrives. If conditions do come back, get the exact language, fix everything in one pass with licensed pros where required, and order the 1004D immediately.