FHA minimum property standards

Quick insights

• FHA property standards focus on safety, security and structural integrity to ensure homes are in livable condition before loan approval.
• Common issues like faulty systems, structural damage or safety hazards must be resolved for FHA financing eligibility.
• When interested in an FHA-backed option, homebuyers might use FHA 203(k) loans to finance both the home purchase and the repairs needed to meet minimum property standards.

When buying a home with an FHA loan, the property must meet certain minimum standards to guarantee it is safe, secure and structurally sound. These FHA minimum standards protect both buyers and lenders ensuring the home is in good condition before the loan is approved. From structural integrity to essential home systems, these standards are important for the FHA and homebuyers alike.

What are the FHA minimum property standard requirements?

FHA requires homes purchased with FHA loans to meet specific property standards to ensure they are safe, structurally sound and livable. Below are the key requirements:

• Safety: Ensuring the home does not pose health or injury risks. Example: Lead-based paint hazards must be properly addressed to prevent exposure.
• Security: Making sure the home is secure and accessible. Example: Doors and windows must be in good condition, operable and lock securely.
• Soundness: Confirming the structural and mechanical integrity of the home. Example: The foundation must be stable, with no significant cracks, shifting or settlement.ec-minimum-property-standards

These standards help buyers secure a home that is move-in ready while protecting lenders from financing unsafe properties.

How do the FHA minimum property standards work?

FHA minimum property standards are enforced through appraisals conducted by an FHA-approved appraiser. During the appraisal, the home is evaluated to confirm it meets safety, security and structural integrity requirements. If the property does not meet these standards, repairs may be required before the loan can be closed. Additionally, homes must be intended as primary residences and comply with local building codes if any major renovations or additions have been made.

When you apply for an FHA loan, you receive a form entitled “For Your Protection: Get a Home Inspection.” You can consider hiring a home inspector because they can provide a more detailed review of the property.

Common safety, soundness and security issues

Certain property conditions can prevent a home from meeting FHA minimum property standards. Here are key issues to watch for:

• Structural issues: Major foundation cracks, roof damage or unstable flooring can comprise the home’s stability and must be addressed.
• Faulty systems: Plumbing, electrical and HVAC systems must be in working order, with no exposed wiring, leaks or malfunctioning heating and cooling units.
• Safety hazards: Broken stairs, faulty smoke detectors or lead-based paint can pose risks and must be corrected.
• Health hazards: The home must have proper ventilation, clean water supply and functioning sewage disposal to avoid potential health concerns.
• Exterior and site requirements: The roof must be intact, drainage should prevent water pooling, and the property must be safely accessible by a roadway.
• Alternations and additions: Any major renovations or structural modifications must comply with local building codes and be properly permitted.

Identifying and addressing these issues early on can help prevent financing delays and ease homebuying with an FHA loan.

FHA home requirements for the house’s interior

Here are several areas that generally have to meet the FHA’s minimum property standards:

• Foundation and structure: The home’s interior must be free from major structural defects, such as sagging floors, cracked walls or signs of foundation failure.
• Roof and ceilings: No leaks, water damage or large cracks in the ceiling.
• Walls and floors: No significant holes, major damage or hazardous conditions like uneven flooring that could cause trips or falls.
• Plumbing: All sinks, toilets, bathtubs and showers must be functional, with no active leaks or major drainage issues.
• Electrical system: No exposed wiring, outdates or faulty electrical components, and must be capable of handling modern appliances safely.
• Heating and cooling: The home must have a heating system that can maintain a temperature of at least 50°F in all living areas; air conditioning, if present, must be operational.
• Kitchen requirements: The kitchen must have a sink with running water and space for a stove and refrigerator.
• Windows and doors: Must be operable, lockable and free from severe damage to ensure security and proper ventilation.
• Ventilation and air quality: Proper airflow must be maintained, and there should be no signs of excessive moisture, mold or pest infestations.
• Pest and termite control: No signs of active termite infestations or significant pest damage.ec-minimum-property-standards

FHA home requirements for the house’s exterior

The FHA’s minimum property standards apply to several exterior home features, such as:

• Roof condition: Must be free of leaks, missing shingles or major wear, with at least two years of useful life remaining.
• Foundation stability: No significant cracks, shifting or water intrusion that could compromise the structural integrity.
• Exterior walls and sliding: Must be weather-tight, with no severe peeling paint, large cracks or damage that could expose the home to the elements.
• Windows and doors: Secure, intact and properly sealed to prevent air leaks and water intrusion.
• Drainage and grading: The property must have proper grading to prevent water from pooling around the foundation.
• Handrails and steps: Steps, porches and decks must be stable and have secure handrails if required for safety.
• Gutters and downspouts: Must be functional and properly direct water away from the home’s foundation.
• Utilities and access: The property must have safe and operational access to essential utilities including water, electricity and sewage disposal.
• Garage and outbuildings: If present, garages and other structures must be in good condition and not pose safety hazards.ec-minimum-property-standards

Addressing and resolving issues related to FHA property standards

If a home doesn’t meet FHA property standards, a loan approval could be issued, but the necessary repairs would be a condition of the file. Sellers may fix issues to keep the sale on track, or buyers can negotiate a lower price and handle repairs themselves. Working with experienced real estate agents and home inspectors can help homebuyers spot potential issues early and avoid delays.

What happens if the property inspection fails?

If a property fails the FHA appraisal or inspection, the loan cannot proceed unless the identified issues are resolved. The seller may choose to make the required repairs, or the buyer can negotiate a solution. In those cases, if the issues cannot be resolved, the buyer may need to find another property that meets FHA standards.

If repairs are extensive, buyers might explore an FHA 203(k) renovation loan to finance both the home purchase and necessary improvements. For extensive fixes, the FHA 203(k) loan allows homebuyers to finance both the purchase and renovations in one loan. Chase does not offer FHA 203(k) loans.

In summary

Meeting FHA property standards is of paramount importance for a successful home purchase. Both homebuyers and sellers benefit from homes that meet these requirements, ensuring a secure and stable investment. Addressing issues early prevents delays and keeps the process on track. Consulting with a Home Lending Advisor can help homebuyers navigate FHA requirements with confidence.