Appraisal required repairs are the conditions an appraiser documents and a lender requires corrected before your loan can close. They cover any defect that compromises safety, livability, or structural soundness. On government-backed loans like FHA, VA, and USDA, these conditions carry the force of a loan requirement. On conventional loans, the bar is higher, but severe issues can still trigger mandatory repairs.
Most required repairs fall into predictable categories: non-functional utilities, roof damage, lead-based paint in homes built before 1978, exposed wiring, foundation issues, and missing handrails. Minor cosmetic problems like scuffed floors or dated fixtures never trigger repair conditions under any loan program.
This guide covers what appraisal required repairs are and how lenders enforce them, loan-type differences for FHA, VA, USDA, and conventional programs, the 10 most common required repairs, your three options when repairs are flagged, and what you can safely skip before selling.
Table of contents
- What are appraisal required repairs?
- Can an appraiser require repairs?
- Required repairs by loan type: FHA, VA, and USDA
- Most common appraisal required repairs
- Red flags that trigger appraisal repairs
- What happens after repairs are required?
- How long do buyers have to request repairs?
- What not to fix before selling your house
- Frequently Asked Questions
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What are appraisal required repairs?
Appraiser required repairs are items the appraiser flags in the report as deficiencies that must be corrected before the lender will approve the loan. The core distinction: appraisers document conditions, and lenders decide whether those conditions become mandatory repair requirements.
The three-part test that drives every flagging decision is whether the property is safe, sound, and sanitary. This framework, often called the FHA “three S’s,” applies across all government-backed loan programs. Any condition that fails one of those tests in a way that affects habitability or structural integrity will appear in the appraisal report as a required repair.
Appraiser authority vs. lender enforcement
An appraiser’s primary job is to estimate value, not direct repairs. When an appraiser notes a deficiency, that note becomes a repair condition only when the lender acts on it. On government-backed loans, the lender has no choice.
Per FHA Minimum Property Standards at HUD, lenders must require that all deficiencies affecting safety, structural soundness, or habitability be corrected before approving a loan. On conventional loans, Fannie Mae guidance gives lenders more discretion. Even so, severe structural or safety issues still routinely trigger lender required repairs without the regulatory floor that FHA and VA provide.
Appraiser required repairs follow a fixed chain: the appraiser documents, the lender issues a condition, the seller or buyer resolves the item, an inspector clears it, and the lender approves the loan. Skipping any step in that chain delays closing.
How a “subject to repair” appraisal works
A subject to repair appraisal means the value the appraiser assigns is conditional. The loan cannot close, and that stated value does not formally apply, until flagged items are completed and cleared by re-inspection.
The appraiser assigns a value assuming the repairs will be made, notes each required item, and steps back. A licensed contractor must complete the work, document it, and submit proof to the lender. In most cases, the original appraiser or a HUD-approved inspector returns for re-inspection before the lender issues final approval. Sellers can review how iBuyer cash offers work to understand why cash transactions bypass this conditional status entirely.
Can an appraiser require repairs?
Yes, an appraiser can flag conditions that become appraiser required repairs, but the authority to make those repairs mandatory rests with the lender. The appraiser documents; the lender enforces.
This distinction matters in practice. When an appraiser notes peeling paint in a 1975 home, the FHA lender must condition the loan on repair. A conventional lender can weigh whether the same condition materially affects value or safety before deciding to act. See how appraisers document repair conditions at Definitive Valuations for a full breakdown of what appraisers must report versus what they flag at their discretion.
When appraisers flag repair conditions
Appraisers must document anything that affects a property’s safety, habitability, or structural soundness. For FHA and VA loans, appraisers also check specific line items required by those programs’ minimum property standards.
Per Fannie Mae Selling Guide B4-1.3, appraisers must note deferred maintenance and conditions that could affect the property’s value or marketability. A cracked tile is cosmetic. A cracked foundation wall with evidence of movement is a structural flag that requires a mandatory engineer review before the loan can proceed.
When lenders make repairs mandatory
Lenders convert flagged items into mandatory repair conditions based on two filters: the loan program rules and the severity of the deficiency. On FHA, VA, and USDA loans, any deficiency touching safety, habitability, or structural soundness must be resolved before closing. These are regulatory requirements built into the program guidelines, not lender preferences.
On a conventional loan appraisal, the lender has more flexibility. Even so, major structural damage, active roof leaks, non-functional mechanical systems, or other conditions that materially affect the property’s marketability will still produce repair conditions. The program flexibility does not extend to conditions that threaten the collateral entirely.
Required repairs by loan type: FHA, VA, and USDA
The strictest repair requirements apply to government-backed loans. The table below shows how each program differs on governing standards, strictness, and common appraisal repairs.
| Loan Type | Governing Standard | Strictness | Common Required Repairs | Re-inspection Required |
|---|---|---|---|---|
| FHA | HUD Minimum Property Standards (MPS) | High | Peeling paint (pre-1978), roof damage, all utilities, water heater, exposed wiring | Yes, appraiser or HUD-approved inspector |
| VA | VA Minimum Property Requirements (MPRs) | High | Handrails, wood rot, lead paint, foundation, mechanical systems, hot water heater | Yes, VA fee appraiser re-inspection |
| USDA | USDA Rural Development property standards | High | Functional utilities, structural soundness, habitability, well/septic if applicable | Yes, USDA-approved inspector |
| Conventional | Fannie Mae / Freddie Mac guidelines | Lower | Major structural damage, safety hazards only | Sometimes, lender discretion |
Source: HUD repair condition categories by loan type, HUD HOC Reference Guide. Verify current standards before transacting.
FHA appraisal repair requirements
FHA appraisal repairs are governed by HUD Handbook 4000.1, Section II.A.7, which sets the Minimum Property Standards for all FHA-insured loans. Appraisers must confirm that all utilities are functional and testable at the time of the visit. A non-operational water heater, a gas line that cannot be tested, or electricity that has been shut off will each produce a required repair note.
FHA is particularly strict about peeling, chipping, or deteriorating paint in homes built before 1978, where lead-based paint is a regulatory concern under HUD regulations (24 CFR Part 35). The T&P (temperature and pressure) relief valve on the water heater must be present and compliant with local code. Any exposed wiring in habitable rooms is a required repair under FHA minimum property requirements. Sellers facing FHA appraisal repairs should expect the lender to issue a formal condition requiring each flagged item to be completed and re-inspected before loan approval.
VA appraisal repair requirements
VA appraisal repairs follow the VA Minimum Property Requirements (MPRs), which mirror FHA standards but include specific additions. Common VA-required repairs include lead-based paint testing and remediation, handrail requirements for all stairs with three or more risers, wood rot removal, foundation repair, electrical and mechanical system corrections, and a functional hot water heater.
The VA fee appraiser conducts a re-inspection after repairs are completed and submits a clearance report to the lender before final approval is issued. Sellers facing VA appraisal repairs will need to work with a licensed contractor who can certify each completed item directly to the VA fee appraiser. VA loans also apply certain local building code compliance standards that can vary by jurisdiction.
USDA appraisal repair requirements
USDA appraisal repairs apply to rural single-family properties financed through the USDA Rural Development program. USDA mirrors FHA standards for habitability, structural soundness, and functional utilities. Properties with private wells or septic systems face additional inspection requirements: the well must produce safe, potable water and the septic system must be functional and adequately sized.
USDA also requires functional access by a road or driveway passable in all weather conditions. A property accessible only by a seasonal road or by crossing another parcel without a recorded easement can produce a required repair or condition note.
Conventional loan appraisal repairs
A conventional loan appraisal uses Fannie Mae or Freddie Mac guidelines rather than HUD Minimum Property Standards. The threshold for required repairs is meaningfully higher than on government-backed programs. Appraisers note deferred maintenance but are not required to condition the appraisal on cosmetic or minor issues.
Conventional lenders typically require repairs only when a deficiency materially affects value, poses a clear safety hazard, or affects their ability to resell the property if the loan defaults. A collapsing roof, failed foundation, or active mold will still produce a repair condition even on a conventional loan.
Most common appraisal required repairs
The following 10 items account for the large majority of common appraisal repairs across all loan types. Items 1 through 5 are drawn from HUD Handbook 4000.1 (FHA baseline); items 6 through 10 come from VA MPR documentation.
- Utilities: all major systems (electric, gas, water) must be functional and testable at the time of the appraisal visit; a utility shutoff triggers an automatic required repair note on government-backed loans
- Water heater: must be present, functional, and compliant with local code; FHA specifically requires a functioning T&P relief valve and proper venting
- Electrical wiring: no exposed wiring is permitted in any habitable space; all outlets must be grounded in modern homes; aluminum wiring in older homes can trigger a safety note requiring remediation documentation
- Plumbing: no active leaks; drains must be functional; water pressure must fall within a normal, testable range at the time of the appraisal
- Roof condition: must have at least 2 to 3 years of remaining useful life per FHA standards; visible damage, missing shingles, or active leaks require repair before closing
- Foundation issues: visible cracks, settling, or structural movement trigger a mandatory structural engineer inspection; hairline cracks may not be flagged, but horizontal cracks or soft spots always are
- Lead-based paint: any chipping, peeling, or deteriorating paint in homes built before 1978 must be encapsulated or removed under HUD regulations (24 CFR Part 35); both FHA and VA require this
- Handrail requirements: all interior and exterior stairs with three or more risers must have a functional handrail; loose, missing, or broken stairs must also be repaired
- Wood rot: any deteriorating wood framing, fascia, or decking that compromises structural integrity must be replaced before closing; surface discoloration alone typically does not trigger a required repair
- HVAC and mechanical systems: heating must be functional in all habitable rooms; cooling is assessed against local climate norms and is required where local standards treat it as a health necessity
These common appraisal repairs appear consistently on FHA appraisal repairs checklists, VA appraisal repairs reviews, and USDA inspection reports alike. Conventional loans may flag the same items but are more likely to require only the most severe.
Red flags that trigger appraisal repairs
These seven appraisal red flags most commonly lead to repair conditions. Some always trigger a mandatory repair; others prompt a required inspection that determines whether repair is necessary. Review the property appraisal red flags checklist at Tamarisk Appraisals for a detailed breakdown of how appraisers evaluate and address each category.
- Foundation cracks or uneven floors: hairline cracks may not require repair; horizontal cracks, significant settling, or soft spots underfoot trigger a mandatory structural engineer review before the loan can proceed
- Roof damage or visible leaks: missing shingles, active leaks, or a roof with fewer than 2 years of remaining life require replacement or repair before any government-backed loan closes
- Water stains or mold evidence: water intrusion in basements, crawlspaces, or ceilings triggers a moisture and mold inspection; active mold must be remediated before closing
- Exposed or outdated electrical wiring: knob-and-tube or aluminum wiring, ungrounded outlets, or any exposed wiring in living spaces will be flagged on FHA and VA loans
- Peeling or chipping paint in pre-1978 homes: any deteriorating paint surface is a lead-based paint flag; it must be tested and remediated before FHA or VA loan approval is issued
- Non-functional utilities or mechanical systems: any system (HVAC, water heater, plumbing) that cannot be tested or is demonstrably non-functional triggers a required repair note on all loan types
- Pest or termite damage: visible structural damage from wood-boring pests triggers both a pest inspection and a repair condition if structural members are compromised
Items 1, 2, 3, and 7 are most likely to extend your closing timeline because they require third-party inspections or engineering reports in addition to the repair work itself.
What happens after repairs are required?
When repairs are required, you have three paths forward. Which one makes sense depends on the cost of the repairs, your available timeline, and the buyer’s loan type.
Option 1: Seller completes the required repairs
Completing repairs is the most straightforward path when the items are minor and the cost is manageable. Per the HUD HOC Reference Guide (Page 1-22), all repair items required by the appraiser or underwriter must be inspected and clearance documented. A professionally licensed, bonded, or registered contractor is typically required for FHA and VA inspected repairs.
Timeline expectations matter. Minor repairs like peeling paint, missing handrails, or a faulty water heater can be completed and re-inspected within one to two weeks. Structural repairs, foundation work, or major roof replacement can add four to eight weeks or more. Build that buffer into the purchase contract’s closing date rather than assuming repairs will clear in the final days before a scheduled close.
Option 2: Negotiate a repair credit or price reduction
Instead of completing repairs yourself, you can offer the buyer a credit toward repair costs, lowering the net sale price. The buyer then handles repairs after closing. This path works more cleanly on conventional loans, where the lender has discretion on whether repairs must be completed before closing.
FHA and VA loans complicate this option. Both programs generally require repairs to be completed and verified before loan approval, not credited and deferred. FHA seller concessions are capped at 6% of the purchase price; VA non-recurring closing costs have a separate cap. Verify current 2026 limits with your lender and check VA seller concession limits and repair policies at Veterans United before structuring any credit offer.
Option 3: Sell the house as-is to a cash buyer
Cash buyers are not subject to lender-mandated minimum property standards. There is no appraisal condition, no repair mandate, and no re-inspection step. The transaction closes on the property’s actual condition, not a loan program’s rules.
A seller facing $15,000 to $30,000 in required repairs may net a comparable or higher amount by selling as-is at a modest price reduction rather than completing repairs and paying 5% to 6% in agent commissions. You can compare cash buyer companies that specialize in as-is purchases, read cash home buyer reviews before accepting any offer, or look at vetted Florida cash buyers if you’re selling in that state. Choosing to sell house as-is removes the repair timeline and re-inspection sequence from the transaction entirely.
How long do buyers have to request repairs?
Buyers have a set window to request repairs after a home inspection, and that window is separate from the appraisal required repair process. Understanding the difference prevents costly mistakes for both sides.
Inspection contingency period basics
The inspection contingency period is the buyer’s contractual window to complete an inspection and request repairs, a price reduction, or a contract termination. This is a buyer-negotiated right, not a lender requirement. Standard purchase contracts give buyers 5 to 10 days after offer acceptance to submit repair requests.
The appraisal contingency is a separate contract provision that lets buyers exit if the property appraises below the purchase price. Appraisal required repairs exist on a third, independent track: even if the buyer’s inspection request period expires with no agreement, the lender can still independently require repairs based on the appraisal report. All three tracks must be resolved before closing.
State-by-state timeline variations
Timelines vary meaningfully by state and contract type. See inspection contingency timelines by state at Redfin for a current state-by-state breakdown.
California buyers may have up to 17 days under the standard California Association of Realtors contract. Texas uses an “option period,” typically 7 to 10 days, where buyers pay a small non-refundable fee (commonly $100 to $500) for the right to cancel or renegotiate. In fast-moving markets, contingency windows as short as 3 days are common, particularly for buyers competing against cash offers. After the contingency period expires, buyers typically lose the right to request repairs without risking their earnest money.
What not to fix before selling your house
Not every deficiency you can see requires repair before selling. Appraisers assess minimum property requirements, not aesthetics. Knowing where the line falls saves money and avoids unnecessary preparation costs.
Per minimum property standards sellers should know at HomeLight, kitchen and bathroom remodels recoup less than 50% of their cost in most markets and are not required by any loan program. Direct money toward items that are actually flagged, not visual updates.
Cosmetic repairs appraisers cannot require
Cosmetic repairs are never required by an appraiser under any loan program. The following items will not produce a repair condition:
- Outdated kitchen or bathroom finishes
- Worn carpet or scuffed hardwood floors
- Dated but functional appliances
- Minor nail holes or scuff marks on walls
- Single cracked tile or small flooring imperfection
- Cosmetic landscaping or curb appeal improvements
- Old but operational HVAC (not broken, just dated)
The difference between required and optional repairs
The table below draws the line between items you can skip and items that may become lender required repairs.
| Skip it (cosmetic, not required) | Fix it (safety/structural, may be required) |
|---|---|
| Outdated kitchen or bathroom finishes | Peeling paint in homes built before 1978 |
| Worn carpet or scuffed hardwood floors | Exposed electrical wiring or faulty outlets |
| Dated but functional appliances | Missing or loose handrails on stairways |
| Minor nail holes or scuff marks on walls | Roof with active leaks or under 2 years of life |
| Old but operational HVAC (not broken) | Foundation cracks with evidence of movement |
| Cosmetic landscaping or curb appeal | Non-functional plumbing or water heater |
| Single cracked tile or small flooring imperfection | Active mold or water intrusion evidence |
Based on HUD Handbook 4000.1 Minimum Property Standards and HomeLight common repairs guide, 2026. Verify with your lender before deciding to skip any item.
Peeling paint is the most commonly misunderstood item on this list. In homes built after 1977, peeling paint is purely cosmetic and will not trigger a repair condition. In homes built before 1978, the same peeling paint is a lead-based paint flag and is mandatory under both FHA and VA guidelines. The year the home was built determines which column applies.
If your appraisal came back with required repairs, you have a third option beyond fixing everything or renegotiating the price. Cash buyers who purchase homes as-is are not subject to lender Minimum Property Standards. They close on the property’s actual condition, not a loan program’s requirements. Through iBuyer.com, you can request competing cash offers from vetted buyers without listing on the MLS, paying an agent commission, or completing a single repair. A seller facing $15,000 to $40,000 in lender-mandated repairs may net a comparable amount by selling as-is and avoiding the repair cost, the repair timeline, and the full commission load.
Repairs Required? Sell As-Is Instead Get competing cash offers without completing a single repair
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Frequently Asked Questions
Appraisers flag conditions affecting safety, livability, or structural soundness, and lenders then decide whether those repairs are mandatory before closing. On FHA, VA, and USDA loans, the lender has no discretion, any flagged safety or habitability issue becomes a required repair condition. On conventional loans, the lender weighs severity before issuing a condition.
The most common appraisal repairs are peeling lead-based paint, roof damage, foundation issues, exposed wiring, non-functional utilities, and missing handrails. FHA appraisals specifically check that all utilities are testable and operational at the time of the visit. VA appraisals add wood rot and mechanical system requirements to that baseline.
Either the buyer or seller can pay for appraisal required repairs; it is negotiable, though sellers most often complete them to keep the transaction moving. Buyers can sometimes take on repairs post-closing, but FHA and VA programs typically require repairs to be completed and verified before loan approval. A seller credit toward repair costs is also an option, subject to loan-program concession limits.
If required repairs are not completed before closing, the lender will not approve the loan and the transaction cannot close unless the buyer pays cash. For subject to repair appraisals, the conditional value does not apply until a re-inspection confirms the repairs are done. Sellers in this position can also accept a cash offer that bypasses the repair condition entirely.
A subject to repair appraisal means the stated property value applies only once specific flagged repairs are completed and verified by re-inspection. The appraiser assigns a value assuming the repairs will be made and notes which items must be cleared before the appraisal is finalized. The lender will not issue loan approval until a re-inspection report documents that each flagged item is resolved.
Common FHA appraisal repairs include non-functional utilities, roof damage, exposed wiring, peeling paint in pre-1978 homes, and non-operational mechanical systems. HUD Handbook 4000.1 sets the Minimum Property Standards for FHA loans. Appraisers apply the three S’s test (safe, sound, sanitary) when deciding whether to flag an issue as a required repair.
VA and FHA appraisals have similarly strict minimum property requirements, though VA specifically requires handrail installation, wood rot remediation, and certain local building code compliance. VA Minimum Property Requirements mirror FHA standards in most categories. VA differs most notably in its requirement that all stairs with three or more risers have a functional handrail.
Buyers typically have 5 to 10 days after an offer is accepted to request repairs, based on the inspection contingency period in their purchase contract. California buyers may have up to 17 days under the standard CAR contract; Texas uses an option period of commonly 7 to 10 days. In fast-moving markets, contingency windows as short as 3 days are common.
Sellers generally should not fix full kitchen or bathroom remodels, minor cosmetic flaws, or functional-but-dated systems that do not affect safety or loan eligibility. Appraisers assess Minimum Property Standards, not aesthetics. Kitchen and bathroom remodels typically recoup less than 50% of their cost in resale value and are not required by any loan program.
Yes, you can sell a house as-is when repairs are required; cash buyers accept as-is properties without loan-driven repair conditions. Selling as-is to a cash buyer removes the lender entirely from the equation. Cash buyers evaluate the property on its actual condition and current market value, with no Minimum Property Standards applied.
Yes, buyers can sometimes complete repairs after closing, but FHA and VA loans typically require repairs to be done and verified before loan approval. A repair escrow arrangement, where funds are held until the buyer completes repairs post-closing, is available on some conventional loans. FHA and VA programs generally require appraiser re-inspection clearance before the lender issues final approval.
If a seller refuses required repairs on a government-backed loan, the transaction typically falls through unless the buyer pays cash. Sellers are not legally obligated to make repairs, but refusing on an FHA, VA, or USDA transaction will cause the loan to fail. Buyers can terminate the contract and recover their earnest money if a repair contingency is in place.
Cosmetic repairs are not required by appraisers; only conditions affecting safety, structural soundness, or habitability trigger mandatory repair conditions. Peeling paint looks cosmetic but is a lead-based paint hazard flag in homes built before 1978, making it mandatory on FHA and VA loans. In post-1978 homes, peeling paint is cosmetic and will not trigger a repair condition.
Appraisal required repairs add one to two weeks minimum and can add four to eight weeks or more for structural or major system work. The sequence is: repairs completed, contractor certifies work, appraiser re-inspects, re-inspection report submitted to lender, lender clears the condition, loan moves to closing. Sellers and buyers should build this buffer into the purchase contract’s closing date.
Reilly Dzurick is a licensed real estate agent with over six years of experience and a member of the iBuyer.com Market Insights Team, covering national trends in home selling and the evolving iBuyer landscape. Her firsthand experience working with buyers and sellers gives her a practical perspective on how these platforms impact real homeowners. She holds a degree in Public Relations, Advertising, and Applied Communication.
