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How strict is FHA home approval during appraisal?

I'm thinking about purchasing a property but I'm concerned that it might not be approved as it needs some repairs to the roof by MJorda_661_748 from Metairie, Louisiana. Oct 16th 2012 Reply


Peter Botros (PeterBotros)
#75 ranked lender in New York - 895 contributions

If the roof issues need to be addressed, you can do one of three things. 1st and best option is to have the seller fix prior to closing. 2nd option would be to use a 203k rehab loan, that will allow you the money to fix the roof as well as other possible improvements. and 3rd option would be to escrow the funds to fix the roof if the lender will allow. Best Of Luck!

Oct 16th 2012
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Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

If it needs repairs then the appraiser will note that on the report and hold it contingent upon the needed repairs being completed. Then, once the repairs are done, they will go back out to inspect and sign off then release it from its held status. The seller would usually have to make these repairs before the loan can move fwd.

Oct 16th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 4,848 contributions

When an appraisal is done, the lender uses an approved FHA appraiser/inspector.. They do more than just estimate value.. They also look at the "habitability" of the property, and that the condition meets FHA guidelines... roofing is important, and the appraiser is trained in seeing if a roof needs repairs.. If it does, then the appraiser will make his appraisal "Subject to" fixing those items that FHA deems necessary to make the home habitable.. At this point it's up to the seller if they want to sell the home; they have to fix the roof. If the seller does not agree to fix the roof, then you can convert your loan to an FHA 203K which is has a repair escrow built in. In essence, your financing the costs to fix the roof along with your purchase.. in either scenario, it's not too big of a deal, just keep in mind that lenders charge extra for the 203K since there's so much more paperwork involved.. So it's best if the seller just agrees to fix the roof.. Keep in mind that even under a conventional loan, the appraiser has an obligation to notate any safety and health concerns on the appraisal.. if a roof is not good, it will be noted, and the conventional lender will require the repair as well.. in the old days.. FHA was a pain in the butt because of the inspection, however nowadays, all lenders pretty much use the same standards across the board for all appraisal.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Oct 16th 2012
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Kevin Morgan (ArborLending)
#2 ranked lender in Louisiana - 15 contributions

Its hard to say how they might determine or assess the damage. FHA appraisals must meet HUD guidelines before a purchase can take place. Normally, in the case of repairs to be made, the appraisal will state what will need to be repaired in order to meet the guidelines. Once the repairs are completed, a final review is done and a full acceptable appraisal is completed. You can check more into this by referencing the HUD Handbook 4150.2 and 4905.1. I am located in Covington and can be reached at 985-867-8334 if you have some other questions or concerns. Thanks!

Oct 16th 2012
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Jackie Stults (jstults)
#45 ranked lender in Illinois - 15 contributions

In some cases an escrow account can be established for the required repairs.

Oct 16th 2012
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#0 ranked lender in

FHA 203K for this issue.

Oct 16th 2012
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