If you're planning to sell your home in Milwaukee, you’ll likely want to understand what happens when a buyer is using an FHA loan. These types of loans make it easier for many people to buy a house, but they also come with specific rules about the home’s condition. That means your property might need to meet certain standards before the deal can go through.
From understanding FHA loan inspection requirements to avoiding inspection delays, here’s what you need to know—especially if you’re hoping for a smoother sale.
What is an FHA loan, and why do buyers use it in Milwaukee?
An FHA loan is a type of government-backed loan insured by the Federal Housing Administration. It’s especially popular with first-time buyers since it allows for lower down payments and flexible credit requirements. Buyers in Milwaukee often use FHA financing because it helps them purchase homes with as little as 3.5% down.
But to qualify for the loan, the home must meet certain conditions. For sellers, it means getting familiar with FHA inspection requirements and what the appraiser will be looking for. If your house doesn’t pass, the buyer’s mortgage loan may not be approved. That’s where FHA appraisal guidelines and inspection steps come in.
FHA appraisal vs. FHA inspection: What’s the difference?
There’s often confusion between a property appraisal and a home inspection, especially when an FHA mortgage is involved.
FHA appraisal
An FHA property appraisal is required for any FHA loan. It has two goals:
-
To confirm that the home is worth what the buyer is paying for it.
-
To make sure the house meets HUD’s minimum property requirements, which focus on safety, soundness, and livability.
The appraisal includes both a value estimate and a basic check of the home’s condition. If your property fails an FHA appraisal, the sale can be delayed or canceled.
FHA inspection
A separate buyer’s inspection is not required by the FHA, but many buyers still choose to have one done. It gives them a deeper look into the home’s structure and systems. While it’s not part of the FHA inspection requirements, it can uncover additional issues the buyer may ask you to fix
What are the key FHA appraisal guidelines for Milwaukee homes?
While FHA loans don’t require a full property inspection, the home must meet certain appraisal guidelines focused on health and safety. Here’s what the appraiser will look at:
-
Safety issues: No exposed wires, broken stairs, or loose handrails.
-
Structure: No major cracks in the foundation, roof leaks, or leaning walls.
-
Working systems: Heating, electrical, and plumbing systems must work properly.
-
Water and plumbing: All fixtures should function with good water pressure, and there should be no leaks.
-
Pest damage: The home must be free from termites or other infestations.
-
Homes (particularly those built before 1978) must not have lead-based paint.
These FHA appraisal requirements help ensure that the home is safe, sound, and livable, protecting both the buyer and the lender.
How to get your Milwaukee home ready for an FHA appraisal
If you're hoping to sell to a buyer using an FHA loan, preparing ahead of time can save you a lot of stress. Here are some simple steps to help you avoid problems during the appraisal:
-
Do a walk-through of your home as if you were seeing it for the first time. Look for any damage or safety concerns you can address quickly.
-
Make sure all utilities are turned on so the appraiser can evaluate systems like heating and plumbing.
-
Take care of minor fixes, such as installing missing handrails or replacing cracked windowpanes.
-
Ensure easy access to crawl spaces, attics, and the furnace so the appraiser can inspect these areas.
-
For older homes, consider getting an at-home test kit to check for lead-based paint.
These simple preparations can help your house meet FHA appraisal standards and keep the sale process on track.
What if your home doesn’t pass the FHA appraisal?
If your property fails to meet FHA loan inspection requirements, a few things can happen:
-
You fix the issues: This is the most common option. The buyer may wait for repairs to be made, but you may also offer concessions.
-
The buyer backs out: If the issues are too serious, the buyer might walk away.
-
The buyer uses a 203(k) loan: This special FHA mortgage lets buyers borrow extra money to make improvements. However, not all buyers qualify, and it can slow down the selling process.
For many sellers, especially those with older or damaged homes, making these fixes may not be worth the time or effort.
Want to skip repairs? Sell your Milwaukee home with We Buy Ugly Houses®.
If your property needs major work or just won’t meet the requirements for an FHA home loan, you don’t have to fix everything to sell. At We Buy Ugly Houses®, we buy homes in Milwaukee “as is,” which means no renovations, no inspections, and no surprises.
With our 3-step home-buying process, you won’t have to worry about FHA appraisal guidelines, minimum property requirements, or whether your buyer qualifies for their mortgage loan. Get a fast offer and close in as little as 3 weeks, skipping the delays and stress that often come with traditional home sales. We pay typical closing costs and don’t charge commissions or hidden fees.†
Worried your Milwaukee house won’t meet FHA guidelines? Contact We Buy Ugly Houses in Milwaukee for a free consultation today.
This blog is for informational purposes only and should not be considered legal advice.
