Last updated: November 2025
Quick Answer
Appraisal requirements vary by loan type, depending on the lender’s standards and government guidelines. VA and FHA loans require safety and livability inspections, while conventional loans focus more on property value. The VA’s minimum property requirements (MPRs) are the strictest, especially regarding health and safety.
Why appraisal requirements vary by mortgage type
When you’re buying a home, the appraisal plays a crucial role in securing your mortgage. But not all appraisals are created equal. The process changes depending on whether you’re using a VA loan, an FHA loan, or a conventional mortgage.
Each loan type follows a unique set of appraisal guidelines designed to protect the lender—and sometimes the buyer—from purchasing a property that doesn’t meet minimum standards. These differences matter, especially for first-time homebuyers comparing loan options.
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What an appraisal does (and doesn’t do)
A home appraisal provides a professional estimate of a property’s market value. Lenders use it to ensure the home is worth the purchase price. In some cases, the appraiser also checks for safety and livability issues.
Appraisers are not home inspectors, but for VA and FHA loans, they are required to note issues related to structural soundness, health risks, or habitability. Conventional loans, by contrast, place less emphasis on property condition unless it’s a clear problem that affects value or marketability.
Comparing appraisal requirements by loan type
The table below outlines how appraisal requirements differ among VA, FHA, and conventional mortgages:
| Feature | VA Loan | FHA Loan | Conventional Loan |
|---|---|---|---|
| Overseen by | Department of Veterans Affairs (VA) | U.S. Department of Housing and Urban Development (HUD) | Private lenders (Fannie Mae/Freddie Mac guidelines) |
| Focus of appraisal | Value + Minimum Property Requirements | Value + Safety and Livability Standards | Market value only (main focus) |
| Condition requirements | Strict (MPRs must be met) | Moderate (safe, sanitary, sound) | Flexible (depends on lender and property) |
| Required repairs | Mandatory before closing | Usually required before closing | Often negotiable or waived |
| Common triggers for repair | Peeling paint, missing handrails, exposed wires, pest issues | Water damage, heating issues, broken steps | Major structural issues or lender concerns |
| Pest inspection | Often required | Sometimes required | Rarely required |
| Appraisal disputes | Reconsideration of Value (ROV) process | Limited dispute process | Appraisal appeal available |
VA loan appraisals and minimum property requirements (MPRs)
VA appraisals are known for being the most detailed in terms of property condition.
These inspections follow the VA Minimum Property Requirements (MPRs), which ensure the home meets strict standards for safety, livability, and structural soundness.
Key MPR categories include:
- Safety: Missing handrails, exposed wiring, and broken windows must be corrected
- Structural soundness: Major cracks, foundation issues, or sagging floors will delay approval
- Sanitary facilities: Functioning bathrooms, kitchens, and running water are required
- Heating: Homes must have a working, permanent heating system
- Pest control: If an infestation is found, a pest inspection and treatment may be required
- Roof condition: The roof must be leak-free with several years of usable life left
- Utilities: Electricity, gas, and water must all be on and operational during appraisal
If any MPR issue is found, the seller must complete the repairs before the loan proceeds.
FHA loan appraisal guidelines
FHA appraisals, managed by HUD, focus on FHA safety standards that ensure the home is sanitary, structurally sound, and free of hazards for the buyer. While less strict than VA appraisals, they still require the home to be free of hazards and in acceptable condition.
FHA appraisal checks include:
- Peeling or chipping paint (especially in homes built before 1978)
- Leaks or water damage
- Inoperable systems (e.g., no working heat)
- Broken steps, missing handrails, or loose flooring
- Roof condition and life expectancy
FHA loans also require certain cosmetic issues to be addressed if they pose a health or safety risk. Like VA loans, appraisers can request repairs that must be completed prior to closing.
Conventional loan appraisal process
One advantage of conventional financing is the flexibility in appraisal standards. Unlike VA or FHA loans, conventional appraisal flexibility means fewer required repairs and more lender discretion.
With a conventional loan, the appraisal is typically limited to determining market value. As long as the property is in reasonable condition and free from obvious issues, the appraisal is less likely to include repair mandates.
That said, conventional lenders can still flag serious problems such as:
- Structural instability
- Severe roof damage
- Mold or water intrusion
- Non-permitted additions or major code violations
In these cases, repairs may be required, or the loan could be denied. However, the appraisal process offers more flexibility, especially if the buyer is willing to accept the home “as-is.”
How appraisal results impact loan approval
An appraisal can delay or derail your loan if the value comes in too low or the home doesn’t meet property condition standards.
Here’s how each loan type handles issues:
- VA loans: A low value triggers a Notice of Value (NOV) with the option to submit a Reconsideration of Value. If MPRs aren’t met, the deal stalls until repairs are completed
- FHA loans: Low appraisals may require renegotiation. The appraisal is tied to the property for 120 days. Repairs must be made before the loan closes
- Conventional loans: The buyer or seller may renegotiate, cancel the deal, or the buyer may cover the difference. Repairs are more flexible and often subject to lender discretion
What buyers should consider when comparing appraisal types
Each loan’s appraisal process has trade-offs:
- VA appraisals offer strong buyer protection but require the home to be in near-perfect condition
- FHA appraisals strike a balance—protecting the buyer while allowing some flexibility
- Conventional appraisals are more lenient, but that means less assurance on property condition unless a separate inspection is done
If you’re buying an older home or one that needs repairs, a conventional loan may avoid appraisal-related delays. However, if your property qualifies for VA or FHA financing, the appraisal requirements can protect your long-term investment.
Not sure which appraisal type fits your home?
If you’re comparing VA, FHA, and conventional loans, it’s important to understand the differences in the appraisal process. These requirements affect how quickly your loan can close. And, whether you’ll need to ask the seller for repairs.
Talk to a loan officer who understands each program’s standards and how they apply in your area. At Salute Mortgage, our veteran-led team helps buyers avoid appraisal delays by catching MPR issues early and advising agents before the inspection.
Not sure which loan fits your property? Let’s walk through it together—Reach out to Salute Mortgage.
FAQ: Appraisal requirements by loan type
A: Yes. VA loans use strict Minimum Property Requirements (MPRs), making them the most condition-sensitive. FHA has moderate standards, while conventional loans are more lenient.
A: No. Repairs are only required if the appraiser finds issues affecting safety, structure, or livability. VA and FHA loans are more likely to require fixes than conventional loans.
A: In some conventional loans, a lender may offer an appraisal waiver. VA and FHA loans require appraisals without exception.
A: The buyer may need to renegotiate, pay the difference out of pocket, or walk away. Each loan type has different rules for handling appraisal disputes.
A: Typically, the buyer pays for the appraisal as part of their closing costs. VA guidelines cap what the buyer can be charged, while FHA and conventional have standard fees.
