FHA appraisal fail vs. pass - minor issues vs. major?
We're looking at a house that is FannieMae, but we plan on using FHA financing. The only problem is the listing agent "isn't sure it will pass the appraisal for FHA". When asked why the reasons given are soiled carpet and 1/3 bathrooms is missing the sink - it's plumbed for one but there's no fixture there. The last occupants started remodeling and boarded up some windows and closed off some doors to change the layout and those parts need to be sided or painted. Other than those things I see nothing majorly wrong with the place. Wouldn't the outside be cosmetic? I can't imagine it not passing from there being a sink missing when there are 2 other functioning bathrooms in the place. Wouldn't FannieMae just replace the sink instead of letting the deal fall through? From what I can tell FHA is more concerned about the safety and security of the place, none of these things would compromise that.
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Your agent is sure. So am I. There is no way that house is going to pass.
And no, FannieMae will not make alterations. You are the one that pocked FHA, not them.
You need to either get a convential loan, or pick another house.
FHA requires the place to be move in ready. No missing fixtures, no unusable flooring, no boarded up anything.
FAnnie Mae is not responsible for replacing fixtures. The outside of the house must not have peeling or flaking paint--and if it's lead paint, it must be completely cleared from the property. All bathrooms and all fixtures must be in working order. All walls must be finished. You can tell FHA you will remove the carpet or have it cleaned yourself. These things are the responsibility of the owner to fix or the deal will fall through. However, you may be able to get the owner to put some money into escrow to have these things repaired--that may satisfy the FHA. Additionally, you can tell the inspector you will have these items taken care of yourself--and then you will have to show him that you have made those arrangements. (i.e., an appointment to have the carpets cleaned or an estimate from a plumber to replace the sink.) DON'T let your listing agent tell you that you cannot contact or speak to the FHA. BE there when they inspect. You have that right.
The condition of properties has been an issue on both conventional and FHA loans. Appraisers have been calling out items such as missing sinks, peeling paint, holes in the walls etc... Keep in mind they are required to document these items for the lender.
If the appraisal has already been completed then you can request that the seller makes the repairs. Once the repairs have been completed the appraiser will need to reinspect the property and sign off on them.
FHA is concerned with marketability of the property and to protect the health and safety of the occupants. The property will need to meet FHA's minimum property requirements.
If the seller is not in a position to repair the property you might want to look at an FHA 203K loan. The 203K will allow you to rehab the property.
Good luck with your purchase... Brian
The house is not going to pass inspection.
If FannieMae is the owner of the property they are not going to put money into the property. Bank owned properties are sold "as is".
You can pay for the repairs like the other person suggested but that's really a silly thing to do. You could do all these repairs, the sell could still fall through and you don't get a penny of reimbursement.
If you can't do a traditional loan, it's probably best to walk away from this one.
It doesn't sound like it will pass FHA to me either. You are correct that FHA is concerned with safety, but it is also concerned with functionality. The missing sink is a problem, but the missing siding is a real concern. Fannie Mae isn't going to spend a dime due to the type of loan you chose to use. If you used a conventional loan program, none of this would matter.
sorry but its not going to pass in the condition that its in. Carpet is not a big deal, if it has 3 bath rooms, then all three need to work, all doors you MUST be able to exit all window must be operate, No missing siding. Go to the HUD website and down load the Handbook 4150.2, there is 18 pages of requirements.
All the place dope believe that but man i am gonna have got to go with #5!! "Ya Yaaaaaaaaaaaaa" ***EDIT*** Sorry you stated to select two so I will even go together with eleven. But #5 is the high-quality!