FHA & VA Home Loan (and Refinance) Inspection Requirements in Pennsylvania: What Lenders Usually Require — and Why

If you’re buying or refinancing a home with an FHA or VA loan, you’ll hear the phrase “required inspections” thrown around a lot. The truth is more nuanced:

• FHA/VA primarily require an appraisal to confirm the home meets baseline health, safety, and habitability expectations (often called “minimum property requirements/standards”).

• Lenders can (and often do) add “overlays”—extra requirements beyond the agency baseline.

• Property type drives most requirements: public utilities vs. private well, septic, older construction, wood-destroying insect risk, etc.

Below is a practical, lender-friendly overview for Western Pennsylvania buyers and homeowners—plus how Keystone Castle Inspections helps you clear these hurdles quickly.

FHA vs. VA: “Appraisal” is required, a “home inspection” is strongly recommended

FHA & VA Home Loan Requirements

A common misconception is that FHA/VA “require a home inspection.” In most cases:

• The FHA/VA appraisal is required and checks for obvious issues tied to safety, soundness, and sanitation.

• A home inspection is a separate, optional service that is far more detailed and designed to protect the buyer (roofing, structure, HVAC, electrical, plumbing, moisture intrusion, etc.).

Even when not mandated by the loan program, many buyers choose an inspection because the appraisal is not meant to be an exhaustive evaluation.

Wood-Destroying Insect (WDI / Termite) inspections: sometimes required, often requested

WDI requirements vary by loan type and location.

VA loans (WDI)

VA guidance requires WDI reporting/inspection in certain areas (and/or when conditions warrant). VA also publishes state-level “local requirements” and notes that if a state is not listed, WDI may only be required when issues are noted in the appraisal.

FHA loans (WDI)

FHA is typically more condition-driven (evidence of infestation, damage, or local/municipal requirements), and lender overlays can apply. (If you’re not sure, assume your lender may ask—especially in older housing stock.)

Bottom line: In Western PA, WDI is common in transactions—especially when the home has wood-to-soil contact, moisture problems, prior repairs, or visible damage.

Private well homes in Pennsylvania: water quality testing is “the big one”

If the property uses a private well, expect the lender to require some form of potability testing—especially for FHA/VA loans.

VA’s rule: local/state/EPA standards + third-party sampling

The VA requires that drinking water be safe and that water testing:

• is performed by a disinterested third party (not the buyer/seller), and

• must meet the local health authority standard (or state standard; if none, then EPA standards).

That’s why lenders frequently ask for panels that align with EPA maximum contaminant levels (MCLs).

Pennsylvania DEP baseline guidance (good to know, even when not “a lender rule”)

PA DEP recommends private well owners test annually for:

• total coliform bacteria

• nitrates

• plus pH and total dissolved solids (TDS) 

The common “FHA/VA-style” water panel in PA

In many FHA/VA transactions in Pennsylvania, lenders commonly want (at minimum):

• Total coliform + E. coli

• Lead

• Nitrates / nitrites

These align with what many lenders use to document potable water and meet the “safe drinking water” intent behind FHA/VA property standards and local authority expectations.

Well yield / flow testing: what lenders commonly look for (and why)

Beyond water quality, many lenders also want to confirm the well can produce enough water for normal residential demand.

In practice, you’ll often see requirements tied to:

• minimum gallons per minute (GPM) at a fixture, and/or

• total available volume (yield over time or storage capacity)

In Western PA transactions, it’s common to see underwriting ask for benchmarks like:

• a minimum yield/availability calculation (example frameworks include “base gallons + per-bedroom gallons” and/or a GPM target)

Because these thresholds can be lender overlays (not always a single universal FHA/VA number), the safest approach is:

1. confirm your lender’s exact requirement in writing, and

2. perform the appropriate well flow/yield documentation accordingly.

Septic / on-lot sewage: what gets flagged in FHA/VA appraisals

If the home is served by an on-lot sewage (septic) system, lenders and appraisers are primarily concerned with:

• evidence of failure (surfacing effluent, strong sewage odors, saturated areas)

• unsafe conditions (open tanks, damaged lids, obvious defects)

• functional red flags that affect habitability

Some lenders request additional documentation (septic inspection, pump/maintenance records), especially if the home is vacant, winter conditions limit observation, or there’s a known history of issues.

Refinance requirements: why they can be very different (Streamline programs)

Refinances often fall into two buckets:

1) Streamline/IRRRL-style refinances (often reduced documentation)

• FHA Streamline refinances often do not require an FHA appraisal (though a lender can still require one).

• VA IRRRL (VA Streamline) often does not require an appraisal, income verification, or a credit underwriting package (again, lender overlays can apply).

What that means for inspections/tests: If there’s no appraisal, there’s often no new “property condition gate”—so water/WDI/etc. may not be requested unless your lender adds requirements or the loan scenario triggers it.

2) Cash-out or full-document refinances (more like a purchase)

If your refi requires a full appraisal (common with cash-out), the property may be evaluated similarly to a purchase—meaning condition issues, well documentation, or pest reports can come back into play.

FAQ

Do FHA loans require a home inspection?

Not typically. FHA requires an appraisal for value and basic safety/condition checks; a home inspection is separate and recommended.

Do VA loans require a WDI/termite inspection in Pennsylvania?

VA WDI requirements depend on VA “local requirements” and appraisal findings; VA publishes state guidance for when WDI reporting is required.

If a house has a private well in PA, what water tests are usually required?

Often total coliform/E. coli plus nitrate/nitrite and lead; VA requires third-party sampling and compliance with local/state/EPA standards.

Does a refinance require the same inspections as a purchase?

Not always. FHA Streamline and VA IRRRL often don’t require an appraisal, which can reduce property-condition related documentation—unless the lender adds overlays.

How Keystone Castle Inspections helps (Western Pennsylvania)

Keystone Castle Inspections specializes in “lender-sensitive” transactions—especially homes on private wells and septic, where timelines and documentation matter.

Common bundles we provide (based on lender needs):

• Home inspection (buyer protection + negotiation clarity)

• WDI inspection

• FHA/VA-style water quality sampling (third-party collection + lab reporting)

• Well flow / yield documentation

• Guidance for next steps if results fail (treatment, retesting, documentation)

Whether the property is on public water/sewer or a well + on-lot sewage, we help you get the right tests done the first time with FHA & VA Home Loan Requirements in mind—so underwriting doesn’t stall your closing.