A home inspection is not required for a mortgage in most cases. Conventional loans backed by Fannie Mae or Freddie Mac, FHA loans, VA loans, and USDA guaranteed loans all rely on an appraisal rather than a separate inspection. The one clear exception is a USDA Section 502 direct loan used to buy an existing home, which requires a whole-house inspection by a state-licensed inspector. Even when your lender does not ask for one, paying for a private inspection is usually worth it.
Appraisal vs. Home Inspection
The two are easy to confuse because both involve a professional walking the property, but they answer different questions.
An appraisal estimates fair market value. The appraiser reviews recent comparable sales, notes the home’s general condition, and produces a Uniform Residential Appraisal Report (Form 1004). They will flag obvious problems like broken windows or missing flooring, but they do not test appliances, crawl through attics, or evaluate mechanical systems in detail. The point is to confirm the property is worth enough to secure the loan.
A home inspection examines physical condition. An inspector evaluates the roof, foundation, plumbing, electrical wiring, HVAC, and other systems, then produces a report identifying current defects and likely future problems. That report is for you, not the lender. You use it to decide whether to move forward, ask for repairs, or walk away.
Conventional Loans
Conventional mortgages that follow Fannie Mae and Freddie Mac guidelines do not require a home inspection. The lender relies on the appraisal to confirm value and does not ask to see a private inspection report.1Fannie Mae. B4-1.4-10, Value Acceptance If the appraisal meets the required loan-to-value ratio, the loan moves forward regardless of anything an inspector found.
Fannie Mae can even waive the appraisal itself through a program called value acceptance. When a loan submitted through Fannie Mae’s Desktop Underwriter receives a value acceptance offer, the lender can skip the appraisal. It is generally unavailable for manually underwritten loans, loans qualified using rental income from the subject property, and gift-of-equity transactions.2Fannie Mae. Value Acceptance For certain rural high-needs properties, Fannie Mae requires the lender to obtain a home inspection as a condition of accepting the value acceptance offer.1Fannie Mae. B4-1.4-10, Value Acceptance
Whether to hire an inspector on a conventional loan is your call. Most buyers write an inspection contingency into the purchase agreement, which typically gives you 7 to 10 days after the seller accepts your offer to inspect and decide.
FHA and VA Loans
FHA and VA loans do not require a separate home inspection, but they do require an appraisal that checks safety and livability in addition to market value. If the property fails those minimum standards, the lender will not approve the loan until the issues are fixed.
FHA
FHA appraisers check conditions that affect health and safety. In homes built before 1978, any peeling or chipping paint must be scraped and repainted using lead-safe work practices before the loan can be endorsed. The appraiser also evaluates the heating system, roof, electrical wiring, plumbing, and structural integrity. If the property does not meet FHA standards, the appraiser files the report “subject to” specific repairs, and the lender requires documentation (such as a contractor’s invoice or a follow-up appraiser visit) before the loan can close.3Department of Housing and Urban Development (HUD). Mortgagee Letter 2025-18, Rescission of Outdated and Costly FHA Appraisal Protocols
VA
VA appraisals follow a separate set of minimum property requirements. The heating system must be permanently installed and able to maintain at least 50 degrees Fahrenheit in areas with plumbing. The roof must prevent moisture entry and offer reasonable future durability. Frayed or exposed electrical wires must be repaired, and each living unit needs its own functioning utilities.4U.S. Department of Veterans Affairs. VA Pamphlet VAP26-7 Chapter 12, Minimum Property Requirement Overview If the air conditioning is installed but not working, the appraiser must condition the report on its repair by a licensed contractor.
Neither loan requires a general home inspection, but neither enhanced appraisal covers the depth of a private one either. A private inspector will look at appliance condition, insulation, and future maintenance needs in far more detail.
USDA Loans
USDA Rural Development is where the answer changes. For a Section 502 direct loan used to purchase an existing home, the borrower must hire a state-licensed inspector to perform a whole-house inspection. The inspection must cover five specific areas: termites and pests, plumbing and water and sewage systems, heating and cooling, electrical systems, and structural soundness. The inspector must provide a written statement that the home appears to meet USDA standards for being decent, safe, and sanitary.5United States Department of Agriculture (USDA). HB-1-3550, Chapter 5 – Property Requirements If deficiencies are found, the loan originator has to identify them and decide whether they prevent the home from meeting those standards.
USDA guaranteed loans, made through private lenders rather than directly by the agency, follow a process closer to FHA and VA and rely on an enhanced appraisal instead of a separate inspection. If you are using a USDA direct loan, the inspection is a condition of approval, not a suggestion.
Specialized Inspections Your Lender May Still Require
Even when a general inspection is not required, certain conditions can trigger mandatory specialized ones. These are usually flagged by the appraiser or the lender’s underwriting department.
Wood-Destroying Insects
Lenders frequently require a Wood Destroying Insect (WDI) report where termite damage is common. For FHA loans, an inspection is required when there is evidence of active infestation, when state or local law mandates it, or when it is customary for the area. The inspection uses the NPMA-33 form (or a state equivalent) and must confirm that all improvements on the property are free of active infestation.6HUD Archives. HOC Reference Guide – Pest Control VA loans require wood-destroying insect inspections across most U.S. states and territories, including most states east of the Rocky Mountains.7U.S. Department of Veterans Affairs. Local Requirements – VA Home Loans
Well and Septic
Properties on a private well or septic system get extra scrutiny. Lenders typically require a water potability test to confirm the supply is free of coliform bacteria, nitrates, lead, and other contaminants. Septic certifications confirm the system works and meets local health department standards. Combined, these tests generally run $150 to $900.
Radon
Radon is a naturally occurring radioactive gas that can accumulate in homes and pose serious health risks. The EPA recommends mitigation at 4 picocuries per liter (pCi/L) or higher. No federal agency universally mandates radon testing for mortgage approval, but some state and local ordinances require it at the point of sale, and individual lenders may request it in high-risk areas. A professional radon test typically costs $150 to $650.
Why Buyers Get Inspections Anyway
In competitive markets, some buyers waive the inspection contingency to make their offer more attractive. That can win a bidding war. It can also leave you paying for problems no one warned you about.
Without an inspection contingency, you lose your main tool for renegotiating the price or requesting repairs. If you discover major problems after closing (a failing foundation, outdated wiring, a deteriorating roof) you cover those costs yourself with no recourse against the seller. Foundation repairs alone can run $5,000 to $15,000 or more, and a full HVAC replacement can exceed $7,000.
The contingency also protects your earnest money. With it in place, you can walk away if the inspection reveals serious issues and keep your deposit. Without it, backing out for inspection-related reasons usually means forfeiting the deposit. You can still hire an inspector after waiving the contingency to gather information, but you give up the contractual right to cancel or negotiate based on what turns up.
What It Costs
A standard home inspection for a single-family home typically costs $200 to $500, with larger or older homes running higher. You pay the inspector directly at the time of the inspection, separate from closing costs.
Appraisal fees vary with property size, location, and complexity. A typical single-family appraisal runs $300 to $600, higher in areas with limited comparable sales data or for more complex properties. The lender orders the appraisal and the fee shows up in your closing costs.
Specialized inspections add to the total. A wood-destroying insect report generally costs $75 to $150. Well and septic inspections combined run roughly $150 to $900 depending on how many contaminants are tested and whether the septic tank needs to be pumped and inspected. Radon testing runs $150 to $650 depending on whether you use a short-term kit or a professional monitor. Building these into your budget early keeps them from turning into surprises at closing.