How to Sell a Property That Won’t Pass an FHA Home Inspection

Selling a home that doesn’t meet FHA home inspection requirements can feel like an uphill battle.

When buyers use FHA loans (mortgages insured by the Federal Housing Administration to help make homeownership more accessible), their lender requires the property to pass strict FHA home inspection guidelines, ensuring the home is safe, secure, and livable.

If your property falls short, it could derail the sale and force you to make costly repairs—or worse, lose your buyer.

But here’s the good news: you don’t have to navigate this process alone or spend thousands fixing up your home. Selling as-is to a trusted cash buyer like Fantastic Homes is often the fastest, easiest solution.

Understanding FHA Home Inspections

What Is an FHA Home Inspection?

An FHA home inspection is part of the appraisal process required for buyers financing their purchase with an FHA loan.

Conducted by a HUD-certified appraiser (approved by the U.S. Department of Housing and Urban Development to assess property value and FHA compliance), the inspection ensures the home meets FHA guidelines for home inspection—focusing on safety, security, and soundness.

Unlike a private home inspection, which highlights both major and minor issues for the buyer, an FHA home inspection only addresses problems that could impact the home’s livability or marketability.

For sellers, this means that any significant deficiencies will need to be resolved before the loan can be approved. These strict FHA standards for home inspection are designed to protect the buyer and lender but can create headaches for sellers with homes in less-than-perfect condition.

Instead of spending time and money on costly repairs, sellers in the Chicagoland area can turn to Fantastic Homes. As a trusted family-owned business, we understand the needs of families and homeowners, the variety of reasons they may need to sell their homes, and the financial difficulties they are often under.

We offer fast, all-cash offers for properties in any condition, helping sellers avoid the stress of meeting FHA requirements.

Why an FHA Home Inspection is Required

FHA loans are designed to make homeownership accessible, especially for buyers with lower credit scores or smaller down payments.

To protect lenders, the FHA mandates inspections to ensure the home serves as suitable collateral. For buyers, this process provides peace of mind, ensuring they won’t face hidden safety hazards or expensive repairs.

However, these FHA home inspection requirements​ can pose significant challenges for sellers, especially if the property requires extensive work to pass inspection.

If you have a property you don’t want the hassle of repairing or don’t think will pass inspection, you can sell it to us for a fast, fair cash offer. Fantastic Homes eliminates the need for costly repairs by purchasing homes in any condition.

FHA Minimum Property Standards: Safety, Security, and Soundness

To pass inspection, the property must meet the FHA’s three core standards:

• Safety: The home must be free from health hazards like mold, lead paint, or asbestos.
• Security: Structural issues such as foundation cracks or significant water damage must be addressed.
• Soundness: Utilities, such as plumbing, heating, and electrical systems, must function properly.

These minimum standards are not negotiable. Homes that fail to meet the FHA home inspection checklist will not qualify for financing, leaving sellers with limited options.

Common Reasons a Property Fails an FHA Home Inspection

Structural Issues (Foundation Cracks, Rotting Wood, etc.)

Structural problems are among the top reasons homes fail the FHA home inspection list.

Issues like foundation cracks, rotting wood, or termite damage raise red flags for inspectors because they can compromise the home’s safety and long-term value.

These repairs are often expensive and time-consuming, making it difficult for sellers to address them quickly.

Roofing Concerns: Lifespan and Layering Requirements

The roof is a critical component of FHA home inspections​.

To pass, it must have at least three years of remaining life and no more than three layers. Damage such as leaks, missing shingles, or sagging areas will result in a failed inspection.

Sellers often face high repair costs or replacement requirements to meet these FHA home inspection guidelines.

Faulty Utilities: Plumbing, Electrical, and Heating Problems

An FHA home inspection places a strong emphasis on functional utilities.

Exposed wiring, outdated electrical panels, leaky pipes, and non-working heating systems are common reasons homes fail the FHA standards for home inspection.

Buyers may also request costly repairs, causing delays or even cancellations.

Health and Safety Hazards: Lead Paint, Mold, and Asbestos

Homes built before 1978 often fail inspections due to lead paint hazards, while mold and asbestos are also major concerns.

These health risks must be professionally remediated before the property can meet FHA home inspection requirements, adding another layer of expense and complexity for sellers.

What Happens When a Property Fails FHA Home Inspection?

The Role of the FHA Appraiser in Loan Denial

If a property fails an FHA home inspection, the appraiser documents the issues in the Uniform Residential Appraisal Report (URAR).

This report is a detailed document required for all FHA appraisals, where the appraiser evaluates the home’s market value and condition based on FHA home inspection requirements. This report is sent to the lender, and the loan remains in limbo until all flagged problems are resolved.

Sellers often bear the burden of making these repairs, which can significantly delay the sale process—especially if the issues are major or require professional remediation.

However, Fantastic Homes buys houses in as-is condition, so you don’t have to worry about making repairs. We also ensure you get the highest off-market price for your property.

Repair Requirements Before Loan Approval

To move forward, the property must meet an FHA home inspection.

Minor fixes like replacing a broken window are relatively simple, but major repairs—such as addressing structural damage or hazardous materials—can take weeks or months to complete.

For many sellers, these obstacles make it challenging to close a sale.

Why Selling As-Is to a Cash Buyer May Be the Best Solution

The Benefits of Selling to a Cash Buyer

Selling as-is to a cash buyer eliminates the need to navigate a strict FHA home inspection.

Cash buyers like Fantastic Homes purchase properties in their current condition, saving sellers the time and money required for repairs. We even handle cleaning your property so you don’t have to lift a finger!

Transactions are fast, straightforward, and free from the red tape of traditional financing.

How Fantastic Homes Helps Sellers Avoid FHA Home Inspection-Related Delays

Fantastic Homes specializes in helping Chicagoland homeowners sell properties quickly, even those that fail FHA home inspections or have become expired real estate listings.

With no repair requirements or appraisal contingencies, sellers can skip the stress and close the deal on their timeline. We’ll provide you with a cash offer within 24 hours—and there’s absolutely no obligation!

Selling Quickly and Hassle-Free Without Repairs

By choosing Fantastic Homes, sellers avoid the financial and emotional strain of meeting FHA home inspection requirements. Instead, they receive a fair, all-cash offer and close the sale without worrying about repairs or delays.

Why Work with Fantastic Homes?

Trusted, Family-Owned Business in Chicagoland

Since 2019, Fantastic Homes has been a trusted real estate agent in Chicago, known for their personalized service and commitment to helping homeowners in need—whether facing foreclosure, inheriting a home, dealing with a deceased parent’s property, trying to sell a vacant home, or more.

Fast and Fair All-Cash Offers for Homes in As-Is Condition

Unlike traditional buyers, Fantastic Homes provides competitive cash offers for properties in any condition, ensuring you get the highest off-market price.

No Repairs, Agent Fees, or Closing Costs

Not only do sellers avoid agent commissions and all the expenses that come with them—like repairs and showings—but we also cover all closing costs. This means you won’t need to spend a dime.

We just want to buy your house!

FAQs About an FHA Home Inspection

What Does an FHA Home Inspection Look For?

An FHA home inspection evaluates the property’s safety, security, and soundness. Key areas include the roof, structure, utilities, and health hazards.

Can a Buyer Fix the Issues to Pass an FHA Home Inspection?

Buyers can address repairs to meet FHA home inspection guidelines, but this often delays the closing process and adds stress for both parties.

What Happens if a Bank-Owned Home Fails FHA Standards?

Foreclosed or bank-owned homes typically don’t meet FHA home inspection requirements and are sold as-is, making cash buyers the most viable option.

Are There Alternatives to FHA Loans for Non-Compliant Homes?

Yes, conventional loans are an alternative, as they often have more lenient property standards than an FHA home inspection.

Ready to Sell Your Property Hassle-Free Without an FHA Home Inspection?

Contact Fantastic Homes Today for a No-Obligation Cash Offer

Selling a home that doesn’t pass an FHA home inspection doesn’t have to be stressful.

Contact Fantastic Homes for a fast, fair, all-cash offer in as little as 24 hours. Our no-obligation pricing commitment means you’re free to decline our offer if it doesn’t meet your expectations!

Skip Repairs, Save Time, and Sell Your Home As-Is

Let Fantastic Homes take the stress out of selling.

Get started today for a smooth, hassle-free transaction!