Lender-required repairs are fixes the appraisal or the loan program says must be made before the loan can close, or before it can be sold to the agency behind it. On FHA, VA and USDA loans they're tied to each program's property standards: safety, security, structural soundness and working systems. On conventional loans they come from the appraiser's condition findings. They aren't your inspector's full report and they aren't cosmetic wish-list items. In Texas, the TREC resale contract says neither the buyer nor the seller has to pay for lender-required repairs unless they agree to in writing, so the real questions are what the condition says, who's paying, and how it gets cleared before closing.
HUD limits required repairs to what's needed to keep the property safe, secure and sound, preserve its continued marketability, and protect the health and safety of the people living there. Cosmetic or minor items, like a missing handrail that isn't a safety threat, holes in window screens, cracked window glass, a dripping faucet, or worn interior paint on a house built after 1978, aren't required repairs. The appraiser still reports them and considers them in the value. HUD also says an appraiser shouldn't call for replacing something just because it's old if it still works (HUD 4000.1 II.D.3.n.i and ii).
Paint is where FHA buyers most often see a condition. On homes built before 1978, the appraiser has to note all defective paint (cracking, scaling, chipping, peeling or loose), inside and out, including fences, sheds and detached garages, and require repair under HUD's lead-based paint rule and any applicable EPA requirements. On homes built in or after 1978, exterior defective paint that exposes the surface to the elements has to be repaired (HUD 4000.1 II.D.3.i and II.D.3.m). If a problem is beyond what an appraiser can judge, like a possible foundation or roof issue, the appraisal can be made subject to an inspection by a qualified professional.
VA has its own Minimum Property Requirements in Chapter 12 of the VA Lenders Handbook. VA updated that chapter effective May 1, 2026 (VA appraiser training page). Repairs the VA appraiser requires show up as conditions on the Notice of Value, and the lender has to clear them. See the VA appraisal and Notice of Value.
For an existing home, USDA's rule is that it must be structurally sound, functionally adequate, in good repair or placed in good repair with loan funds, and have adequate and safe electrical, heating, plumbing, water and wastewater systems (7 CFR 3555.202(b)).
Fannie Mae uses condition ratings from C1 to C6. Homes rated C1 through C5 are eligible "as is." A C6 rating means a deficiency affecting safety, soundness or structural integrity, and the appraisal must be completed "subject to" the repair, with the home reaching at least C5 before the loan is sold. The appraiser also has to report physical deficiencies that could affect safety, soundness or structural integrity, and the property is appraised subject to those repairs (Selling Guide B4-1.3-06). Freddie Mac has its own property requirements in its Guide.
Your home inspector works for you and reports everything they see. The appraiser works for the lender and reports what affects value and the program's property standard. They overlap, but they're not the same list.
On the TREC One to Four Family Residential Contract (Resale), TREC No. 20-19 (form dated 05-04-2026), Paragraph 7E covers lender-required repairs and treatments, including wood-destroying insect treatment:
Paragraph 7F says that unless otherwise agreed, the seller completes agreed repairs before closing, gets any required permits, uses licensed people (or people commercially in that trade where no license exists), and gives the buyer documentation of the work and payment. If the seller doesn't finish, the buyer can use the contract's default remedies or extend closing up to 5 days (TREC 20-19). Paragraph 7D(2) is where specific seller repairs get written in, and TREC tells you not to use vague phrases like "subject to inspections."
Sometimes, and only within each program's rules. It's not a general right.
If the repairs are the whole point of buying the house, a standard loan is the wrong tool. Look at renovation loans, like FHA 203(k), which are built to finance the work.
This example is made up to show how the pieces fit.
Dana is buying a 1965 house in Fort Worth for $240,000 with an FHA loan. Her inspector writes up an old dishwasher, a loose cabinet door and some peeling exterior trim paint. The FHA appraiser, separately, requires repair of the defective paint on the house and the detached garage because the home was built before 1978, and makes the appraisal subject to it. The dishwasher and cabinet door are option-period items Dana can negotiate with the seller. The paint is a loan condition. Under Paragraph 7E, neither party has to pay for it unless they agree in writing, so Dana's agent and the seller's agent sign an amendment: the seller will have the paint repaired by a qualified contractor before closing, using lead-safe practices. The appraiser reinspects, the condition clears, and the dishwasher never comes up with the lender.
Got a "subject to" appraisal or a repair condition you're not sure about? Send it to me before you and the seller sign anything, and I'll tell you what the lender actually needs to clear it and how it fits your contract. Schedule a call, or when you're ready, start an application.
Links checked Oct 21, 2026.
About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.
Equal Housing Opportunity.
Last reviewed: Oct 2026