What Are the FHA Appraisal Requirements?

FHA appraisals use the Uniform Residential Appraisal Report, which requires a description of the property being appraised; the property's condition, including repairs and renovations needed; any physical deficiencies in the property; and adverse conditions that affect the property's livability or structural integrity. FHA appraisals combine property appraisal and home inspection, which are handled separately with convention loans.

FHA appraisers must guarantee that an appraised and approved home meets minimum safety and habitability guidelines. Appraisals require owners to repair certain conditions. Electrical systems must not have any frayed or exposed wires and all rooms must have sources of heat. Water heaters must meet local building codes and roofs must keep moisture out. If a roof already has three layers and needs repairs, the FHA requires a new roof. The property must be structurally sound. Any defective construction, leads or termite damage must be repaired, and deteriorating asbestos must be inspected by a professional with asbestos experience.

Properties that contain or are located near certain hazards and nuisances typically do not pass FHA appraisals. These hazards include contaminated soil, oil and gas wells on the property, airport noise and heavy traffic. Proximity to a hazardous waste site, high-pressure petroleum lines or high-voltage power lines may also cause a property to fail its FHA appraisal.