Ensuring a Smooth Loan Process: Property Requirements for FHA, VA, and USDA Loans

Government-backed loans check the house as carefully as they check you: FHA, VA, and USDA appraisals all require working smoke detectors, safe electrical, intact windows and doors, handrails on open stairwells, no chipped pre-1978 paint, a roof with at least two years of life, and proper well and septic separation. VA and USDA add their own items — water tests for private wells, and termite inspections on nearly all VA deals. Knowing the list before you offer prevents the re-inspections that derail closings.

Common property requirements for FHA, VA, and USDA loans

Each program — FHA, VA, and USDA — has specific property standards that must be met for loan approval. Download our one-page checklist, or walk the categories below:

• Accessibility:
  • Attic access: A functioning access point to the attic is required for inspection purposes. Blocked, locked, or screwed-shut access will necessitate a re-inspection.
  • Crawl space access: The homeowner is responsible for ensuring the crawl space is accessible for a thorough inspection.
• Safety:
  • Smoke detectors: Each floor and the area outside each sleeping area must have a functioning smoke detector.
  • GFI outlets (Ground Fault Circuit Interrupter): While not always an FHA requirement, most local building codes mandate GFI outlets in bathrooms and near open sinks in kitchens to prevent shock hazards.
  • Electrical safety: Exposed wiring or uncovered junction boxes pose safety risks and will need to be addressed.
  • Broken windows and doors: Broken or damaged windows and doors compromise security and weatherproofing. Repairs are necessary before loan approval.
  • Handrails: Open stairwells with three or more steps require sturdy handrails.
• General condition:
  • Lead paint: For properties built before 1978, chipped or peeling paint might contain lead. Repairs may involve scraping and repainting with lead-safe materials.
  • Appliances: A functioning stove and refrigerator are typically required for loan approval.
  • Plumbing: Leaking faucets or weak water pressure indicate potential problems that need attention.
  • Trip hazards: Uneven walkways, driveways, or poorly installed carpeting should be addressed.
• Roof: Generally, no more than three layers of shingles are allowed, and the remaining roof life should be at least two years, as determined by the appraiser’s visual inspection.
• Well & septic systems (for properties with private water and sewage) — the appraiser verifies these isolation distances from the well:
  • Property line: minimum 10 feet
  • Septic tank: minimum 50 feet
  • Drain field: minimum 100 feet (reduced to 75 feet if permitted by local authorities)

Additional requirements for USDA loans

• Water test: Mandatory if the property has a private water source (well).

Additional requirements for VA loans

• Water test: Like USDA, VA requires a water test for properties with private water sources.
• Termite inspection: Mandatory for all VA-financed properties except a few designated counties in Northern Michigan. Buyers are typically responsible for the cost.

Remember: These are general guidelines. Specific requirements vary with your loan program, local building codes, and lender policies.

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Tips for navigating property requirements

• Consult a mortgage professional early: An experienced lender can explain the requirements for your chosen program and spot likely issues from the listing photos alone.
• Use qualified home inspectors: Ensure your inspector knows FHA, VA, or USDA standards for the loan type you are pursuing — our guide to common home inspection issues covers what they look for.
• Ask questions: Never hesitate to ask your lender or realtor about property eligibility — cheaper to ask in week one than to re-inspect in week five.