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What FHA Says About Repair Requirements
Here's what we're looking at: The FHA handbook includes a section specifically on repair requirements (updated as of September 2015), which addresses things like wells, septic systems, foundations, roofs, electrical systems, and mold. When Fannie Mae gets involved with a loan, they require lenders to get qualified professionals to inspect the property and identify any needed repairs across those same categories. If repairs turn out to be necessary to meet eligibility standards, the lender has to document and prove that the work was actually completed before the loan can be sold to Fannie Mae—there's a specific form and verification process for this (referenced as Form 1004D and the completion alternatives section of their guidelines).
Straight from HUD/FHA Single Family Handbook 4000.1 and Fannie Mae Selling Guide — nothing added.
Here's what we're looking at: The FHA handbook includes a section specifically on repair requirements (updated as of September 2015), which addresses things like wells, septic systems, foundations, roofs, electrical systems, and mold. When Fannie Mae gets involved with a loan, they require lenders to get qualified professionals to inspect the property and identify any needed repairs across those same categories. If repairs turn out to be necessary to meet eligibility standards, the lender has to document and prove that the work was actually completed before the loan can be sold to Fannie Mae—there's a specific form and verification process for this (referenced as Form 1004D and the completion alternatives section of their guidelines).
Straight from HUD/FHA Single Family Handbook 4000.1 and Fannie Mae Selling Guide — nothing added.
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→ HUD FHA 4000.1 Single Family Housing Policy Handbook (Chief Appraiser Document Library)
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© Copyright Notice: © 2026 Fannie Mae. Excerpts shown for research and reference only. Full document available at selling-guide.fanniemae.com. Reproduction restricted to Fannie Mae-approved lenders.
Relevant News
Recent public coverage related to this topic — cited, not reproduced
VA Minimum Property Requirements Change 46 effective May 1, 2026: Defective paint on post-1978 homes no longer a repair condition
Effective May 1, 2026, the VA removed the requirement for appraisers to call for repairs of defective paint on homes built after 1978, treating interior and non-weather-exposed exterior paint as cosmetic issues.
Read full story at Nelson Home Group →
UAD 3.6 adoption and FHA guidance on garage conversions
FHA HB 4000.1 (pages 499–500) provides current guidance on treatment of garage conversions in appraisals, with criteria for counting converted space as GLA that do not explicitly require permits—relevant to understanding when to include or exclude unpermitted conversions.
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FHA Single Family Housing Policy Handbook Table of Contents Handbook 4000.1 vii Last Revised: 8/12/2026 b. Minimum Property Requirements and Minimum Property Standards…
HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 16
· View at official source (HUD.gov — SFH Handbook 4000.1) →
· Last verified: 2026-10-10
FHA Single Family Housing Policy Handbook Table of Contents Handbook 4000.1 vii Last Revised: 8/12/2026 b. Minimum Property Requirements and Minimum Property Standards (08/19/2024) ..... 806 c. Gross Living Area (04/18/2023) ..................................................................................... 821 d. Appliances (09/14/2015) ................................................................................................. 823 e. Swimming Pools (09/14/2015) ....................................................................................... 823 f. Utilities – Mechanical Components (02/16/2021) .......................................................... 824 g. Roof Covering (09/14/2015) ........................................................................................... 826 h. Structural Conditions (09/14/2015) ................................................................................ 826 i. Defective Paint (04/10/2025) .......................................................................................... 826 j. Attic Observation Requirements (04/18/2023) ............................................................... 826 k. Foundation (04/10/2025) ................................................................................................ 827 l. Crawl Space Observation Requirements (04/18/2023) ................................................... 827 m. Environmental and Safety Hazards (01/24/2022) ........................................................... 828 n. Repair Requirements (09/14/2015) ................................................................................. 829 o. Utility Services (04/18/2023) .......................................................................................... 830 p. Onsite Sewage Disposal Systems (09/14/2015) ............................................................. 834 4. Valuation
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Protection Zones) at civil airports or within Clear Zones at military airfields, the Mortgagee must reject the Property for insurance. Properties located in Accident Potential…
HUD/FHA Single Family Handbook 4000.1 · HUD_FHA_4000.1.pdf · Page 222
· View at official source (HUD.gov — SFH Handbook 4000.1) →
· Last verified: 2026-10-10
Protection Zones) at civil airports or within Clear Zones at military airfields, the Mortgagee must reject the Property for insurance. Properties located in Accident Potential Zone 1 (APZ 1) at military airfields may be eligible for FHA mortgage insurance provided that the Mortgagee determines that the Property complies with Department of Defense guidelines. iii. Minimum Required Repairs When the appraisal report or inspection from a qualified entity indicates that repairs are required to make the Property meet HUD’s MPR or MPS, the Mortgagee must comply with Repair Requirements. If repairs for Existing Construction cannot be completed prior to closing, the Mortgagee may establish an escrow account in accordance with Repair Completion Escrow Requirements. iv. Leased Equipment The Mortgagee must ensure
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report from a qualified professional to confirm the eligibility of the property and if repairs are required (well, septic, foundation, roof, electrical, mold, etc.). If repairs or…
Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 637
· View at official source (selling-guide.fanniemae.com) →
report from a qualified professional to confirm the eligibility of the property and if repairs are required (well, septic, foundation, roof, electrical, mold, etc.). If repairs or alterations are necessary to bring the property into compliance with Fannie Mae's eligibility requirements, the lender must provide satisfactory evidence and documentation showing the condition has been corrected or completed prior to sale of the loan to Fannie Mae. See Form 1004D and Completion Alternatives in B4-1.2-05, Requirements for Verifying Completion and Postponed Improvements for the applicable requirements to verify completion of repairs, alterations, or inspections. Uniform Appraisal Dataset (UAD) 3.6 Policy Lenders using UAD 3.6 must follow the requirements in the UAD 3.6 Policy Supplement. Recent Related Announcements The table below provides