Loan & Insurance-Related Conditions

Different loan programs and homeowners insurance policies sometimes place additional emphasis on certain property conditions—particularly items related to safety, habitability, or deferred maintenance. While a home inspection is not an appraisal or an insurance review, many buyers find it helpful to understand where inspection findings and loan or insurance requirements commonly overlap.

Inspection reports do not label items as “FHA,” “VA,” or “insurance-related,” and requirements can vary by lender, appraiser, and carrier. However, reviewing your inspection findings alongside common loan and insurance considerations can help you and your realtor identify items that may come up later in the process. This allows you to be proactive—whether that means gathering information, requesting repairs, or planning ahead—rather than being caught off guard.

Buyers are encouraged to review their inspection report with their realtor and lender to determine whether any findings may apply to their specific loan or insurance situation.

FHA Loans (Federal Housing Administration)

FHA loans generally emphasize visible conditions related to safety, security, and soundness. While inspection reports do not identify FHA-specific requirements, some inspection findings may overlap with conditions commonly reviewed during an FHA appraisal.

Examples of inspection findings that may overlap include:

  • Missing or damaged handrails and guardrails

  • Trip hazards such as uneven walkways, steps, or flooring

  • Roof defects or signs of active leakage

  • Electrical safety concerns (including missing GFCI protection where typically required)

  • Plumbing leaks or non-functional fixtures

  • Inoperable or unsafe heating systems

  • Peeling or chipping paint (particularly in homes built prior to 1978)

  • Broken windows or damaged glazing

  • Missing smoke or carbon monoxide alarms (when required)

This list is not exhaustive, and not every FHA loan or appraisal will require repairs.

VA Loans (Veterans Affairs)

VA loans focus on habitability and safety to ensure the home is suitable for occupancy. Inspection reports do not identify VA-related requirements, but some inspection findings may overlap with issues commonly reviewed during VA appraisals.

Potential overlapping conditions may include:

  • Unsafe stairs, handrails, or guardrails

  • Roof damage or active moisture intrusion

  • Electrical hazards or improper wiring (including missing GFCI protection in applicable areas)

  • Plumbing leaks or inadequate water supply

  • Heating systems that are not operational

  • Broken windows or exterior doors that do not secure properly

  • Pest or wood-destroying insect activity (when applicable)

  • Unsafe decks or walking surfaces

Requirements and interpretations vary by lender and appraiser.

Conventional Loans

Conventional loans typically have fewer property condition requirements, but appraisers may still note defects that affect safety, habitability, or structural integrity. Inspection reports do not predict appraisal outcomes, but certain findings may overlap.

Examples of possible overlap include:

  • Structural movement or significant foundation concerns

  • Major roof defects or active leaks

  • Electrical or plumbing safety hazards

  • Non-functional heating systems

  • Severe deferred maintenance

Homeowners Insurance Considerations

Homeowners insurance carriers may review inspection reports or conduct separate inspections to assess risk. Inspection reports do not identify insurance requirements, but certain observed conditions may overlap with issues insurers commonly evaluate.

Examples may include:

  • Aging or deteriorated roof coverings

  • Electrical concerns, including missing GFCI protection

  • Active plumbing leaks or evidence of past water damage

  • Improperly installed or unsafe heating equipment

  • Fire-related hazards

  • Unsafe decks, stairs, or railings

  • Vacant or poorly maintained structures

Insurance requirements vary widely by carrier and policy.

Key Takeaway

Inspection findings are observations of visible conditions at the time of inspection. While inspectors do not mark or predict what will be required by a loan program or insurance carrier, reviewing inspection findings alongside common loan and insurance considerations can help buyers identify items they may wish to address proactively.

Clients are encouraged to review their inspection report with their realtor and lender to determine whether any findings may overlap with loan or insurance requirements and whether addressing those items in advance makes sense for their situation.