If you’d like to buy a home but don’t have a lot of money for a down payment – or your credit score isn’t very high – an FHA loan can open the door to homeownership. But to get one of these loans, which are insured by the Federal Housing Administration, you’ll generally need to go through an appraisal.
Here, we’ll discuss what an FHA appraisal is and walk through FHA appraisal guidelines so you know what to expect.
Key Takeaways:
- FHA appraisals are a necessary part of getting an FHA loan, and the results are typically valid for up to 180 days.
- To qualify for an FHA loan, properties must meet certain standards set by the U.S. Department of Housing and Urban Development, including safety, security and structural integrity.
- There are four possible appraisal outcomes – including a requirement for repairs or a lower appraisal value – and some results can delay a sale or cause it to fall through altogether.
FHA Loan Limits And Requirements In 2026
FHA loans are mortgages that are backed by the U.S. Department of Housing and Urban Development (HUD). FHA loans come with limits that can change from year to year. In 2026, the limit for FHA loans is $541,287 for a one-unit home in a low-cost area and $1,249,125 in a high-cost area (such areas depend on the county where they are located).
You typically need a credit score of 580 or higher if you’re making a 3.5% down payment to get an FHA loan. With a 10% down payment, the minimum credit score is 500. The home also generally needs to go through an appraisal, which is an estimate of its market value.
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What Is An FHA Appraisal And Why Is It Needed?
An FHA appraisal is an assessment of the home conducted by a qualified appraiser. Its purpose is to:
- Determine the market value of the home
- Figure out whether the home meets FHA minimum property standards
The primary reason that FHA lenders want to determine the market value of the home is that they want to make sure they’re not writing a loan for more than what the property is worth. But they also want to make sure the home is structurally sound.
An appraisal may be required for a refinance too. If you’re doing a standard FHA refinance, an appraisal is generally required. However, if you’re getting an FHA streamline refinance – a simplified refinance program for existing FHA borrowers – the appraisal requirement may be waived.
FHA Appraisal Vs. Home Inspection
While an FHA appraisal is generally a requirement to get an FHA loan, that appraisal is not the same thing as a home inspection.
An FHA appraisal will generally flag obvious issues like a broken staircase or a roof that’s leaking. A home inspection, on the other hand, typically involves a deeper dive to uncover hidden problems that aren’t so obvious.
Even though you might not need a home inspection to get an FHA loan, it’s still an important thing for you to have as a buyer. After all, a home inspection could uncover issues that could end up being costly for you to fix once you close on your home.
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FHA Appraisal Guidelines: Which Homes Qualify?
Not every property is eligible for FHA financing. Properties that qualify include:
- Single-family homes
- Semi-detached homes
- Multiplex homes
- Row houses
- Individual condos
- Manufactured homes
HUD Minimum Standards
The FHA appraisal guidelines set forth by HUD are quite lengthy, but in summary, these are the key requirements for a home to qualify for an FHA loan:
- Safety: The home can’t pose health risks or put inhabitants at risk of injury.
- Security: The home must be in good condition, with doors and windows that lock.
- Structural soundness: The home must be structurally intact.
Issues that can prevent a home from meeting the requirements for an FHA appraisal include:
- A cracked foundation or structural issues
- A roof that’s missing pieces
- Water damage
- Uneven flooring
- Drainage issues
- Electrical wiring that’s not up to code
- Improper ventilation
- Signs of an active termite infestation
- Unstable or uneven stairways (inside or outside)
How Appraisers Assess Value
To determine a home’s value, appraisers generally:
- Identify comps – sale prices within the past 6 – 12 months of similar (comparable) properties in the same or nearby neighborhood
- Evaluate the home’s size, including lot size and number of bedrooms and bathrooms
- Evaluate the general condition and amenities of the property, including its age, quality of construction materials and any energy-efficient upgrades, such as solar panels
- Assess how the home’s location affects its value – for instance, whether it’s on a busy or quiet street
Typical Outcomes Of An FHA Appraisal
An FHA appraisal can result in several outcomes:
- Approved as-is, which means there are no repairs required
- Approved with conditions, which means repairs noted by the appraiser must be completed before closing
- Subject to further inspection, which means the appraiser requires an expert to come in and check the home again
- Rejected, which means the property doesn’t meet FHA standards
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What Happens When An FHA Appraisal Comes Back Too Low?
If the appraised value of a home comes in lower than the purchase price, that could prevent you from finalizing your FHA loan. In this scenario, your choices are generally to renegotiate the purchase price or walk away from the deal.
For example, let’s say you’re buying a home for $320,000, but the appraised value comes in at $280,000. An FHA lender is generally not going to be willing to write a loan for an amount that exceeds the home’s value. In this case, the seller may agree to accept $280,000 instead. If they don’t come down on price, however, you may have to walk away.
Of course, you could simply pay the difference between the sale price and the appraised value yourself. But that might mean having to come up with a lot of money. If you’re getting an FHA loan for the benefit of the low down payment requirement, it may not be feasible to cover an appraisal gap.
If you’re doing an FHA appraisal in the course of a refinance, you also have options. First, you can offer to bring extra cash to the table to make up the difference.
Let’s say your home appraises for $5,000 less than you need it to. If refinancing makes sense because you can qualify for a much lower interest rate on your loan, it pays off in the long run to take that $5,000 difference out of your savings and use it to bridge the gap.
You can also try waiting to see if home values rise or find out if you qualify for a streamline refinance, which may not require an appraisal. Finally, you can request a Reconsideration of Value (ROV) from the lender if you feel the appraisal isn’t accurate. If you want to submit an ROV, just be ready to show evidence of repairs or new price comps to explain why a second look is warranted.
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FHA Appraisal Checklist
There are a number of key items that will get covered on an FHA appraisal. Knowing what these are can be helpful whether you’re a buyer or a seller.
If you’re a seller, you can take steps to address problems that may cause your home to be rejected during the appraisal process. If you’re a buyer, you can identify potential issues and discuss them with your seller ahead of time.
Exterior Items
An appraiser will usually:
- Inspect the foundation for cracks or leaks
- Check the roof for missing parts
- Check for loose siding or bricks
- Ensure steps are secure and stable
- Inspect driveways and walkways for cracks or trip hazards
Windows And Doors
An appraiser will typically:
- Confirm windows and doors open, close and lock
- Make sure windows and doors are properly sealed
Interior Items
An appraiser will generally:
- Check walls and ceilings for moisture damage
- Check for mold
- Make sure flooring is generally even
- Check electrical wiring and outlets
- Make sure all light fixtures work properly
- Ensure the home has smoke and carbon monoxide detectors
- Ensure all major appliances are working
- Ensure proper ventilation in kitchens and bathrooms
- Check plumbing systems and fixtures for leaks
- Confirm all sinks, toilets and showers work
- Ensure proper insulation
- Make sure interior stairs are secure and have proper banisters
- Check for termite and other pest damage
- Check for hazardous materials like asbestos
How To Prepare A Home For An FHA Appraisal
As a seller, it’s in your best interest to have an FHA appraisal go well. If your home is approved as-is, it could help avoid delays with your closing.
Here are some things you can do to prepare your home:
- Make obvious repairs. If things are broken or there’s visible damage, address it before the appraisal.
- Check safety features. Make sure your smoke detectors work and that there is plenty of ventilation in kitchens and bathrooms.
- Make sure your appliances are accessible. An appraiser will generally test out appliances like water heaters and HVAC systems, so make sure they can access them easily.
- Make sure all outlets, light switches and fixtures are working. Fix items that are clearly not functioning properly.
FAQ On FHA Appraisals
The Bottom Line: An FHA Appraisal Protects You And Your Lender
An FHA appraisal is a necessary step in securing an FHA loan. While it might seem like an extra hurdle, the purpose of an FHA appraisal is to protect your lender as well as you as the buyer.
If an appraisal reveals any problems with a home, it’s important to know about those issues and have them addressed. And if an appraisal comes in low, you can use it to negotiate a lower price.
As a seller, it’s important to do what you can to prepare your home for an FHA appraisal. Addressing issues in advance could pave the way to a smooth closing.
Thinking about pursuing an FHA loan? Learn more about the advantages of FHA loans.
Maurie Backman
Maurie Backman has more than a decade of experience covering personal finance topics that include mortgages, loans, retirement, Social Security, and investing. Prior to becoming a full-time writer, she worked in the financial industry as well as in product design and marketing. Maurie holds a bachelor's degree from Binghamton University, where she studied creative writing and finance. She was happy to combine her two areas of study into a career that allows her to educate consumers on a host of financial topics.
