FHA Minimum Property Standards

Homebuyers intending to finance a home purchase with a Federal Housing Administration (FHA) loan sometimes receive a nasty surprise: They won't be allowed to purchase a particular property because it doesn't meet FHA requirements. Why do these requirements exist, what are they, and can they be remedied so buyers can purchase the homes they want?

What Are Minimum Property Standards?

According to the U.S. Department of Housing and Urban Development (HUD), the FHA requires that the properties financed with its loan products meet the following minimum standards:

  • Safety: The home should protect the health and safety of the occupants.

  • Security: The home should protect the security of the property.

  • Soundness: The property should not have physical deficiencies or conditions affecting its structural integrity.

HUD then describes the conditions the property must meet to fulfill these requirements. An appraiser will observe the property's condition during the required property appraisal and report the results on the FHA's appraisal form. Property appraisals are one of many requirements that buyers fulfill before settling on a deal.

The FHA does not require the repair of cosmetic or minor defects, deferred maintenance and normal wear if they do not affect the safety, security or soundness of the home. The FHA says that examples of such problems include but are not limited to the following:

  • Missing handrails

  • Cracked or damaged exit doors that are otherwise operable

  • Cracked window glass

  • Defective paint surfaces in homes constructed post-1978 (because of lead paint hazards)

  • Minor plumbing leaks (such as dripping faucets)

  • Defective floor finishes or coverings (worn through the finish, badly soiled carpeting)

  • Evidence of previous (non-active) wood-destroying insect/organism damage where there is no evidence of unrepaired structural damage

  • Rotten or worn-out counter tops

  • Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post-1978

  • Poor workmanship

  • Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting)

  • Crawl spaces with debris and trash

  • Lack of an all-weather driveway surface

There are many areas, however, where the FHA does require problems to be remedied in order for the sale to close. Here are some of the most common issues that homebuyers are likely to face. (If you are buying a home, check out Top Tips For First-Time Home Buyers.)

Electrical and Heating

  • The electrical box should not have any frayed or exposed wires.

  • All habitable rooms must have a functioning heat source (except in a few select cities with mild winters).

Roofs and Attics

  • The roofing must keep moisture out.

  • The roofing must be expected to last for at least two more years.

  • The appraiser must inspect the attic for evidence of possible roof problems.

  • The roof cannot have more than three layers of roofing.