diff --git a/resource_customizations/core.spinkube.dev/SpinApp/health.lua b/resource_customizations/core.spinkube.dev/SpinApp/health.lua
new file mode 100644
index 0000000000..91289fe6f4
--- /dev/null
+++ b/resource_customizations/core.spinkube.dev/SpinApp/health.lua
@@ -0,0 +1,71 @@
+hs = {}
+
+-- Check if status exists
+if not obj.status then
+  hs.status = "Progressing"
+  hs.message = "Waiting for status to be available"
+  return hs
+end
+
+-- Initialize variables for conditions
+local available = false
+local progressing = false
+local availableMessage = ""
+local progressingMessage = ""
+
+-- Check conditions - prioritize failure conditions first
+if obj.status.conditions then
+  for _, condition in ipairs(obj.status.conditions) do
+    if condition.type == "Progressing" then
+      -- Check for timeout or failure in progressing condition first
+      if condition.status == "False" and (condition.reason == "ProgressDeadlineExceeded" or string.find(string.lower(condition.message or ""), "timeout") or string.find(string.lower(condition.message or ""), "failed")) then
+        hs.status = "Degraded"
+        hs.message = condition.message or "Application deployment has failed"
+        return hs
+      end
+      -- If progressing is true, mark it (any progressing=true condition wins)
+      if condition.status == "True" then
+        progressing = true
+        progressingMessage = condition.message or "Application progress status"
+      end
+    elseif condition.type == "Available" then
+      -- For available, we want all to be true, so any false condition wins
+      if condition.status == "True" then
+        available = true
+        availableMessage = condition.message or "Application availability status"
+      else
+        available = false
+        availableMessage = condition.message or "Application is not available"
+      end
+    end
+  end
+end
+
+-- Check ready replicas if specified
+local readyReplicas = obj.status.readyReplicas or 0
+local desiredReplicas = obj.spec.replicas or 1
+
+-- Determine status based on conditions
+if not available then
+  hs.status = "Degraded"
+  hs.message = availableMessage or "Application is not available"
+  return hs
+end
+
+if readyReplicas < desiredReplicas then
+  hs.status = "Progressing"
+  hs.message = string.format("Waiting for replicas to be ready (%d/%d)", readyReplicas, desiredReplicas)
+  return hs
+end
+
+if progressing then
+  hs.status = "Progressing"
+  hs.message = progressingMessage or "Application is still progressing"
+  return hs
+end
+
+-- All checks passed
+hs.status = "Healthy"
+hs.message = string.format("Application is healthy with %d/%d replicas ready", readyReplicas, desiredReplicas)
+
+return hs
\ No newline at end of file
diff --git a/resource_customizations/core.spinkube.dev/SpinApp/health_test.yaml b/resource_customizations/core.spinkube.dev/SpinApp/health_test.yaml
new file mode 100644
index 0000000000..eaa6964f35
--- /dev/null
+++ b/resource_customizations/core.spinkube.dev/SpinApp/health_test.yaml
@@ -0,0 +1,17 @@
+tests:
+- healthStatus:
+    status: Healthy
+    message: "Application is healthy with 2/2 replicas ready"
+  inputPath: testdata/healthy.yaml
+- healthStatus:
+    status: Degraded
+    message: "ReplicaSet \"simple-spinapp-5b8d8bc656\" has timed out progressing."
+  inputPath: testdata/degraded.yaml
+- healthStatus:
+    status: Progressing
+    message: "ReplicaSet \"simple-spinapp-c54f5bdb4\" has successfully progressed."
+  inputPath: testdata/progressing.yaml
+- healthStatus:
+    status: Progressing
+    message: "Waiting for status to be available"
+  inputPath: testdata/no-status.yaml 
\ No newline at end of file
diff --git a/resource_customizations/core.spinkube.dev/SpinApp/testdata/degraded.yaml b/resource_customizations/core.spinkube.dev/SpinApp/testdata/degraded.yaml
new file mode 100644
index 0000000000..8e25b8cb22
--- /dev/null
+++ b/resource_customizations/core.spinkube.dev/SpinApp/testdata/degraded.yaml
@@ -0,0 +1,36 @@
+apiVersion: core.spinkube.dev/v1alpha1
+kind: SpinApp
+metadata:
+  annotations:
+    kubectl.kubernetes.io/last-applied-configuration: >
+      {"apiVersion":"core.spinkube.dev/v1alpha1","kind":"SpinApp","metadata":{"annotations":{},"labels":{"argocd.argoproj.io/instance":"spin-apps"},"name":"simple-spinapp","namespace":"spin-apps"},"spec":{"executor":"containerd-shim-spin","image":"ghcr.io/spinkube/containerd-shim-spin/examples/spin-rust-hello:v0.13.19","replicas":2}}
+  creationTimestamp: '2025-02-17T20:30:09Z'
+  generation: 8
+  labels:
+    argocd.argoproj.io/instance: spin-apps
+  name: simple-spinapp
+  namespace: spin-apps
+  resourceVersion: '34094'
+  uid: ef4b3af3-ae67-4c49-8cbb-0cc4fb7b83ba
+spec:
+  checks: {}
+  enableAutoscaling: false
+  executor: containerd-shim-spin
+  image: ghcr.io/spinkube/containerd-shim-spin/examples/spin-rust-hello:v0.13.19
+  replicas: 2
+  resources: {}
+  runtimeConfig: {}
+status:
+  activeScheduler: containerd-shim-spin
+  conditions:
+    - lastTransitionTime: '2025-02-17T20:55:37Z'
+      message: Deployment has minimum availability.
+      reason: MinimumReplicasAvailable
+      status: 'True'
+      type: Available
+    - lastTransitionTime: '2025-02-17T21:05:38Z'
+      message: ReplicaSet "simple-spinapp-5b8d8bc656" has timed out progressing.
+      reason: ProgressDeadlineExceeded
+      status: 'False'
+      type: Progressing
+  readyReplicas: 2
diff --git a/resource_customizations/core.spinkube.dev/SpinApp/testdata/healthy.yaml b/resource_customizations/core.spinkube.dev/SpinApp/testdata/healthy.yaml
new file mode 100644
index 0000000000..96e3aa19f6
--- /dev/null
+++ b/resource_customizations/core.spinkube.dev/SpinApp/testdata/healthy.yaml
@@ -0,0 +1,36 @@
+apiVersion: core.spinkube.dev/v1alpha1
+kind: SpinApp
+metadata:
+  annotations:
+    kubectl.kubernetes.io/last-applied-configuration: >
+      {"apiVersion":"core.spinkube.dev/v1alpha1","kind":"SpinApp","metadata":{"annotations":{},"labels":{"argocd.argoproj.io/instance":"spin-apps"},"name":"simple-spinapp","namespace":"spin-apps"},"spec":{"executor":"containerd-shim-spin","image":"ghcr.io/spinkube/containerd-shim-spin/examples/spin-rust-hello:v0.13.0","replicas":2}}
+  creationTimestamp: '2025-02-17T20:30:09Z'
+  generation: 9
+  labels:
+    argocd.argoproj.io/instance: spin-apps
+  name: simple-spinapp
+  namespace: spin-apps
+  resourceVersion: '38985'
+  uid: ef4b3af3-ae67-4c49-8cbb-0cc4fb7b83ba
+spec:
+  checks: {}
+  enableAutoscaling: false
+  executor: containerd-shim-spin
+  image: ghcr.io/spinkube/containerd-shim-spin/examples/spin-rust-hello:v0.13.0
+  replicas: 2
+  resources: {}
+  runtimeConfig: {}
+status:
+  activeScheduler: containerd-shim-spin
+  conditions:
+    - lastTransitionTime: '2025-02-17T20:55:37Z'
+      message: Deployment has minimum availability.
+      reason: MinimumReplicasAvailable
+      status: 'True'
+      type: Available
+    - lastTransitionTime: '2025-02-17T21:37:41Z'
+      message: ReplicaSet "simple-spinapp-c54f5bdb4" has successfully progressed.
+      reason: NewReplicaSetAvailable
+      status: 'False'
+      type: Progressing
+  readyReplicas: 2
diff --git a/resource_customizations/core.spinkube.dev/SpinApp/testdata/no-status.yaml b/resource_customizations/core.spinkube.dev/SpinApp/testdata/no-status.yaml
new file mode 100644
index 0000000000..c2745b79c7
--- /dev/null
+++ b/resource_customizations/core.spinkube.dev/SpinApp/testdata/no-status.yaml
@@ -0,0 +1,9 @@
+apiVersion: core.spinkube.dev/v1alpha1
+kind: SpinApp
+metadata:
+  name: simple-spinapp
+  namespace: spin-apps
+spec:
+  executor: containerd-shim-spin
+  image: ghcr.io/spinkube/containerd-shim-spin/examples/spin-rust-hello:v0.13.0
+  replicas: 2
\ No newline at end of file
diff --git a/resource_customizations/core.spinkube.dev/SpinApp/testdata/progressing.yaml b/resource_customizations/core.spinkube.dev/SpinApp/testdata/progressing.yaml
new file mode 100644
index 0000000000..6fe6d15fcb
--- /dev/null
+++ b/resource_customizations/core.spinkube.dev/SpinApp/testdata/progressing.yaml
@@ -0,0 +1,36 @@
+apiVersion: core.spinkube.dev/v1alpha1
+kind: SpinApp
+metadata:
+  annotations:
+    kubectl.kubernetes.io/last-applied-configuration: >
+      {"apiVersion":"core.spinkube.dev/v1alpha1","kind":"SpinApp","metadata":{"annotations":{},"labels":{"argocd.argoproj.io/instance":"spin-apps"},"name":"simple-spinapp","namespace":"spin-apps"},"spec":{"executor":"containerd-shim-spin","image":"ghcr.io/spinkube/containerd-shim-spin/examples/spin-rust-hello:v0.13.0","replicas":2}}
+  creationTimestamp: '2025-02-17T20:30:09Z'
+  generation: 9
+  labels:
+    argocd.argoproj.io/instance: spin-apps
+  name: simple-spinapp
+  namespace: spin-apps
+  resourceVersion: '38985'
+  uid: ef4b3af3-ae67-4c49-8cbb-0cc4fb7b83ba
+spec:
+  checks: {}
+  enableAutoscaling: false
+  executor: containerd-shim-spin
+  image: ghcr.io/spinkube/containerd-shim-spin/examples/spin-rust-hello:v0.13.0
+  replicas: 2
+  resources: {}
+  runtimeConfig: {}
+status:
+  activeScheduler: containerd-shim-spin
+  conditions:
+    - lastTransitionTime: '2025-02-17T20:55:37Z'
+      message: Deployment has minimum availability.
+      reason: MinimumReplicasAvailable
+      status: 'True'
+      type: Available
+    - lastTransitionTime: '2025-02-17T21:37:41Z'
+      message: ReplicaSet "simple-spinapp-c54f5bdb4" has successfully progressed.
+      reason: NewReplicaSetAvailable
+      status: 'True'
+      type: Progressing
+  readyReplicas: 2