If you're using an FHA loan to buy a home or selling to an FHA buyer, you've likely heard about "FHA required repairs." These are mandatory fixes identified during an FHA appraisal that must be completed before the loan can close. Unlike conventional loans, FHA has strict minimum property standards (MPS) to ensure the home is safe, secure, and structurally sound. Missing these repairs can delay or even kill the deal. This guide breaks down exactly what repairs are required, how to handle them, and common pitfalls to avoid.
What Are FHA Required Repairs?
FHA required repairs are issues flagged by an FHA-approved appraiser that violate the Department of Housing and Urban Development's (HUD) minimum property standards. These standards cover health, safety, and structural integrity. Common triggers include peeling lead-based paint (on homes built before 1978), damaged electrical wiring, missing handrails, leaking roofs, broken windows, and unsafe foundations. The appraiser will note these items on the appraisal report, and the lender will require them to be fixed before funding. Not all issues are deal-breakers—minor cosmetic flaws like worn carpet or outdated fixtures are typically fine.
Step-by-Step: How to Handle FHA Required Repairs
Step 1: Review the Appraisal Report
Once the appraisal is complete, your lender will share the report. Look for the section titled "Subject to the Following Repairs" or similar. This lists every required repair. Don't ignore any item—even a small crack in a window can hold up the loan.
Step 2: Get Quotes from Licensed Contractors
For repairs like roof replacement, electrical work, or foundation fixes, hire licensed professionals. Get at least two quotes to compare pricing. Save all receipts and contracts—your lender may need proof of work.
Step 3: Complete Repairs Before Closing
Most FHA loans require repairs to be finished before closing. Work with your real estate agent and lender to schedule inspections after repairs. Some lenders allow an escrow holdback, where funds are set aside for repairs done after closing, but this is less common.
Step 4: Obtain Final Inspection (If Required)
If the appraiser noted that a reinspection is needed, schedule one after repairs are complete. The appraiser will confirm the issues are resolved. This may cost an additional fee (typically $100–$200).
Step 5: Submit Documentation to Lender
Provide your lender with invoices, photos, and the final inspection report (if applicable). Once approved, the loan can proceed to closing.
Common FHA Required Repairs and How to Fix Them
Peeling or Chipping Paint (Pre-1978 Homes)
If the home was built before 1978, any peeling paint must be addressed because of lead-based paint hazards. Scrape and repaint with non-lead paint. For large areas, hire a certified lead abatement contractor.
Roof Leaks or Missing Shingles
The roof must have a remaining useful life of at least two years. If there are leaks or extensive damage, you may need a full replacement. Patch small leaks, but if the roof is near the end of its life, consider replacing it to avoid future issues.
Electrical Hazards
Exposed wiring, faulty outlets, or missing cover plates must be fixed. Hire an electrician to repair or replace damaged components. Ensure all outlets are grounded and GFCI-protected near water sources.
Plumbing Issues
Leaky faucets, running toilets, or clogged drains need to be repaired. For more serious problems like sewer line backups, a plumber may need to replace sections of pipe.
Safety Hazards (Handrails, Steps, Windows)
Missing handrails on stairs with more than four steps must be installed. Broken windows need replacement. Ensure all smoke detectors and carbon monoxide detectors are present and working.
Tips for Buyers: What to Look for During a Home Tour
Before making an offer, inspect the property for potential FHA red flags. Check for peeling paint on older homes, look at the roof from the ground for missing shingles, test all windows and doors, and look for water stains on ceilings or walls. Also, examine the electrical panel for exposed wires and test a few outlets. If you spot issues, negotiate with the seller to have them fixed or lower the price. Remember: the seller is not obligated to make repairs, but if they don't, you may need to walk away or use a different loan type.
Common Mistakes to Avoid
Mistake 1: Assuming All Repairs Are Optional
Every repair listed on the appraisal is mandatory. You cannot pick and choose. If the appraiser says replace the roof, you must replace it—or the deal falls through.
Mistake 2: Doing DIY Repairs Without Permits
Some repairs, especially electrical or structural work, require permits and licensed contractors. DIY fixes may not pass reinspection. Always check with your lender first.
Mistake 3: Ignoring Small Issues
A missing outlet cover seems minor, but it's a safety hazard and must be fixed. Don't assume the appraiser will overlook anything.
Mistake 4: Waiting Until the Last Minute
FHA repairs often take longer than expected. Start scheduling contractors as soon as you get the appraisal report. Delays can push back your closing date.
Frequently Asked Questions
Q: Can I negotiate who pays for FHA required repairs?
A: Yes. Buyers and sellers can negotiate who covers repair costs. Sellers may agree to fix issues or offer a credit at closing. However, the repairs must be completed before closing unless an escrow holdback is approved.
Q: What happens if the seller refuses to make repairs?
A: If the seller won't fix the issues, the buyer can choose to walk away (and get their earnest money back if the contract includes an inspection contingency) or switch to a different loan type like a conventional loan, which has less strict requirements.
Q: Are there any repairs that cannot be done after closing?
A: Most FHA repairs must be completed before closing. However, in some cases, lenders allow an escrow holdback for minor repairs. This is not guaranteed and depends on the lender and the severity of the issues.
Q: Do I need a reinspection after repairs?
A: It depends on the appraiser's initial report. If they noted that a reinspection is required, you must schedule one. If not, you can provide receipts and photos. Confirm with your lender.
Final Thoughts
FHA required repairs can feel overwhelming, but they're designed to protect you from buying an unsafe home. As a buyer, know that most issues are fixable, and you can negotiate with the seller. As a seller, consider pre-addressing common problems to attract FHA buyers. Work closely with your real estate agent and lender, keep all documentation, and don't cut corners. With the right approach, you can navigate the repair process smoothly and get to closing without unnecessary stress.