Lender Required Repairs: What Are They?

Lender Required Repairs on a House

If you are planning to purchase a home using a Conventional, FHA (Fair Housing Administration) or VA (U.S. Department of Veterans Affairs) loan, it’s important to verify the home’s condition meets the standard lender requirements. The lender required repairs vary depending on the type of loan you are getting, but the requirements are in place to ensure the property is safe and habitable.

The loan will not get funded if the lender required repairs are not met. The FHA and VA want protection since these properties act as collateral for loans that they’re backing. Further, the FHA and VA are used as leverage points for safety concerns.


  • FHA and VA lender required repairs are similar and focus on safety, security, and soundness of the property.
  • A buyer and seller can negotiate who will pay for the lender required repairs.
  • An appraiser can require repairs for a conventional loan for major issues such as a leaking roof, mold, or lead paint.
  • Lender required repairs can be avoided if you sell to a cash buyer.

How Do Lenders Determine The Need For Repairs?

Lenders can determine the repairs needed based on a couple different documents: an appraisal report and any disclosure notices from the seller. An appraisal is conducted when purchasing a home with a Conventional, FHA, or VA loan by a certified appraiser. The appraisal report is sent back to the lender containing the condition of the property.

How Do Lenders Determine The Need For Repairs?
A lender can pose additional requirements beyond the loan guidelines.

The FHA requires that loans must close within 120 days of the appraisal, and the original appraiser must return to the property within this timeframe to confirm that any necessary repairs have been made. Otherwise, a new appraisal is required and the process starts all over again.

The lender must comply with the FHA or VA requirements and can also have additional requirements within their loan company. This means you could pass the FHA or VA repair guidelines but still not get your loan funded due to additional lender-specific requirements. The lender needs to be able to protect themselves in case the homeowner defaults on the property.

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Does a Seller Have to Make Repairs?

Many wonder if the seller is required to make the repairs… The buyer and seller can actually negotiate who will pay for the repairs. More often then not the seller pays as they own the property and are typically more incentivized if they want to close the deal. However, a buyer could be motivated to pay for the lender required repairs in a seller’s market if they want to really lock in on getting the home.

If the buyer and seller cannot come to an agreement on who is in charge of the lender required repairs, the purchase agreement can be terminated. As long as there is a financing contingency in the contract, the earnest money deposit is returned to the buyer.

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FHA Lender Required Repairs

The FHA is primarily concerned with health and safety issues, security of the property, and structural soundness of the home. (We’re not talking about cosmetic work.) Some of the most common lender required repairs revolve around converted garages, non-permitted additions, and peeling paint in homes built before 1978 due to a potential lead hazard.

Converted garages have become more common to make house hacking and AirBnb rentals either possible or more profitable. The FHA guidelines could lead to a converted garage being reverted. It’s important to note that FHA requirements are not the end all be all– underwriters can inject additional repairs, and converted garages are a red flag.

Non-permitted additions can be a real headache. The FHA may require these additions be brought up to code or completely torn out if the addition poses a danger. This can be expensive and timely to correct.

What are FHA Required Repairs?

Other lender required repairs for an FHA loan include:

What are FHA Required Repairs
  • Unpainted downspouts and broken rain gutters
  • Rotting outbuildings in need of demolition
  • Exterior doors that don’t properly open and close
  • Exposed wiring and uncovered junction boxes
  • Major plumbing issues and leaks
  • Inoperable HVAC systems
  • Leaky or defective roofs
  • Roofs with a life expectancy of fewer than three years
  • Roof composition over shake
  • Active and visible pest infestations
  • Rotting window sills, eaves, or support columns on a porch
  • Missing appliances that are usually sold with a home, such as a stove
  • Bedrooms without minimally-sized windows for egress or windows with bars that don’t release
  • Foundation or structural defects
  • Wet basements
  • Evidence of standing water in the crawl space
  • Inoperable kitchen appliances
  • Empty swimming pools, pools without working pumps, and abandoned pools with mosquito fish
  • Ripped screens
  • No pressure relief valve on the water heater
  • Leaning or broken fences

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VA Lender Required Repairs

A VA loan also has required repairs known as “Minimum Property Requirements” or MPR’s that are similar to the FHA required repairs. Once again, the emphasis is on safety, security, and structural soundness of the property.

What are VA Required Repairs

What are VA Required Repairs?

  • Mechanical systems must be safe and have reasonable future utility
  • Heating and roofing must be adequate
  • Crawl spaces and basements must be dry
  • Property must be free of termites, dry rot, and fungus growth
  • Lead-based paint must be remediated

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Do Conventional Loans Have Lender Required Repairs?

Yes, a conventional loan could require repairs based on the outcome of an appraisal, and similar to the other appraisals, health and safety factors are prioritized. However, a conventional loan doesn’t have as strict of guidelines for approval compared to other types of loans (i.e. FHA and VA).

Do Conventional Loans Have Lender Required Repairs
Conventional financing approval requires a safe, secure, and structurally sound home.

An appraiser will evaluate the exterior and interior of the home. He/she will make sure the roof and foundation are structurally sound when evaluating whether the home can be financed conventionally. Major issues such as mold, water or fire damage, and lead paint could raise red flags for a conventional appraisal (and an inspector may be called in to take a closer look).

Even if the appraiser passes the property for conventional financing, a loan company can have more strict guidelines. The lender needs to be sure the home is worth the price the buyer is paying. This can make selling a distressed property difficult, as buyers using conventional financing may be unable to purchase.

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How To Avoid Lender Required Repairs

avoid lender required repairs

If you want to sell your home without the headaches of making lender required repairs, cash buyers are a great option. We buy houses as-is for cash, so there are no loans in the transaction. No matter the condition of your home, you can sell it to investors who buy houses for cash. No hassles. No headaches. No repairs!

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Andy Kolodgie

Andy Kolodgie is an experienced real estate investor in the Washington DC Metro area. As owner of The House Guys, Andy's goal is to provide home sellers with creative real estate options beyond the typical cash offer. He's been featured on multiple publications including Yahoo Finance, MSN, HomeLight, Credit.com, Apartment Therapy, Business.com, LegalZoom, Zolo, and Creditcards.com.

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