The answer depends less on the wiring than on which rulebook your loan follows. An FHA loan, a VA loan and a conventional loan each send an appraiser with different instructions, and none of those instructions mention knob and tube by name. People find this site by asking it every way you'd expect: whether lenders care, whether banks are refusing mortgages, whether FHA will finance it. So we read the three rulebooks themselves.
What each rulebook says
| Loan | Mentions knob and tube? | What the appraiser must flag | Where it's written |
|---|---|---|---|
| FHA | No | Visible frayed or exposed wiring; a system that can't run the house; amperage that looks inadequate | HUD Handbook 4000.1, appraiser's electrical section |
| VA | No | Visible frayed or exposed wiring | VA Lender's Handbook, chapter 12, topic 14 |
| Conventional (Fannie Mae) | No | A condition rating of C6, meaning defects that affect safety, soundness or structural integrity | Fannie Mae Selling Guide B4-1.3-06 |
So old wiring in good shape can pass. Old wiring that's damaged, exposed or patched badly usually can't, until it's repaired.
FHA: the appraiser tests a sample
HUD's handbook is the strictest of the three, because its appraiser does more than look. The appraiser must check for "visible frayed wiring or exposed wires in the dwelling, including garage and basement areas," report if the amperage and panel size look inadequate, and "operate a sample of switches, lighting fixtures, and receptacles." They aren't required to open the panel.
Two more rules matter for an older house:
- The appraiser can call in an electrician. If they can't tell whether the house meets HUD's minimum property requirements, they can require an inspection by a qualified person, and "faulty or defective mechanical systems (electrical, plumbing or heating/cooling)" is one of the listed reasons. HUD also says appraisers may not ask for inspections just to limit their own liability, so a request should come with a stated reason.
- The lender has the last word. If a defect can't feasibly be corrected, "the Mortgagee must reject the Property." Otherwise the loan closes only after the reported defects are fixed.
Read together, these rules mean an intact run in the attic isn't the problem in itself. Damage the appraiser can see, or a switch or outlet that doesn't work when they try it, is.
VA: the appraiser doesn't flip switches
VA's chapter on minimum property requirements is shorter. Topic 14 says each unit "must have electricity for lighting and for necessary equipment," and that "any visible frayed or exposed electrical wires must be repaired." It also says the appraiser "does not perform any operational checks," so the utilities don't even need to be on.
That cuts both ways. A VA appraisal is less likely to catch a dead circuit, which also means it's a poor substitute for your own inspection. And if a VA appraisal does require repairs, topic 44 lets the Veteran ask VA to waive them, with the lender's agreement, as long as the house is habitable. VA says those waivers shouldn't cover anything that could create a safety problem, so frayed wiring is a weak candidate.
VA's Change 46 notice, effective for appraisals ordered after May 1st, 2026, removed several requirements (radon among them). The electrical topic wasn't touched.
Conventional: it comes down to a condition rating
Fannie Mae's guide has no electrical checklist at all. It works through the appraiser's overall condition rating. A loan on a house rated C6, meaning defects severe enough to affect "safety, soundness, or structural integrity," is not eligible for sale to Fannie Mae, and the house has to be repaired to at least C5 first. Minor items that don't touch safety can be appraised "as is."
So with a conventional loan, everything rests on how the appraiser rates what they saw. That's Fannie Mae's rule for the loans it buys. Lenders can add their own, and we didn't read Freddie Mac's version.
The 60-amp rule that isn't in the handbook
Several real estate sites say FHA, Fannie Mae and Freddie Mac accept knob and tube if it works, is safe and has at least 60 amps. We searched all 1,871 pages of HUD's handbook for it. Neither the word "knob" nor a 60-amp rule appears anywhere. What the handbook does say about amperage is the line above: the appraiser reports it if it "appears inadequate for the Property." If someone quotes you a 60-amp rule, ask them where it's written.
If the house needs rewiring anyway
FHA has a loan built for this. A Limited 203(k) rolls repairs into the mortgage, including "repairing/replacing plumbing, heating, AC, and electrical systems," up to $75,000 in total rehabilitation costs. Our report engine puts a partial to whole-home rewire at $8,000 – $30,000+, well under that cap for most houses.
The standard 203(k) adds a rule of its own. When a 203(k) consultant writes up electrical work, the service must be upgraded "to the greater of 100 amp or local code." For a house still on a small fuse box, that turns a hidden cost into a line item you can finance.
How common this is
The houses in question are old. Our report engine flags knob and tube for homes built through 1955. Census decade counts don't split out the early 1950s, so the closest figure is homes built before 1950: 23.2 million, or 16.2% of the 143.8 million homes in the 50 states and DC. That's 16.9 million built before 1940 and 6.4 million built in the 1940s, from the American Community Survey 2020-2024. Year built isn't the same as wiring, though. Plenty of those houses were rewired decades ago, which is the whole reason to learn what knob and tube looks like before assuming anything.
What to do before your deadline
- Ask the inspector to write it up precisely. Is the knob and tube still energized? Is any of it frayed, spliced or exposed? Those are the words the FHA and VA rules use, so get them in writing.
- Tell your loan officer early, and name the loan type. An FHA appraiser will test switches and outlets. A VA appraiser won't. A conventional appraiser rates the condition overall. Knowing which one is coming tells you what to fix first.
- Book an electrician before the appraisal if you can. Our engine puts a dedicated evaluation at $150 – $350. A written evaluation answers the question an FHA appraiser would otherwise hand off, and it gives you a repair quote to negotiate with.
- Don't treat the mortgage as the only hurdle. Insurance can be the harder part. Our guide on whether knob and tube needs replacing before closing covers that side.
How we checked this
- What we read, on 17 October 2026. HUD Handbook 4000.1, the version issued August 13, 2025. hud.gov answered us with an automated bot check, so we read HUD's own PDF as saved by the Internet Archive from hud.gov. We also read the VA Lender's Handbook, chapter 12 (topics last revised March 28, 2019), again as VA's own file saved by the Internet Archive, because VA's site redirected us away from it. VA's Change 46 notice we read from a copy posted on a third-party website. Fannie Mae's Selling Guide B4-1.3-06 (06/04/2025) came straight from Fannie Mae's own site.
- Our own data. The cost ranges and the 1955 cutoff come from our report engine. The housing counts are our tally of the Census Bureau's county figures, the same data behind our study of homes built before 1940. The questions in the first paragraph are searches that showed this site in Bing.
- What we didn't check. HUD may have revised a section since August 2025. We didn't read Freddie Mac's guide, USDA's rules, or any individual lender's overlays. A lender is free to be stricter than the agency it sells to.