203(k) Final Inspection

[Theresa2484]

Received a request today to do a Final Compliance Inspection to verify only the 203(k) rehab items listed on the original report. It's from BOA, not the original client.

In all the years I've done these, I've never re-inspected. Never, ever, once. Is this the appraiser's duty? For some reason, I thought there was a specific HUD-approved inspector for these.

Does anyone have any knowledge/experience?

 

[Mike Kennedy]

http://appraisersforum.com/showthread.php?t=173781

 

[Lloyd Bonafide]

I'm not sure about a regular 203K loan - the 203k consultant might be required to do a final inspection on those type of rehabs. I would check with the lender in that case.

But for a 203K Streamline, you can definitely do the reinspection, since no consultant was involved. And I have done a couple of Streamline reinspections in the past year or two where BOA was not the original client, but they funded the loan for the broker, and they did hire me to reinspect.

 

[AnonApprsr]

What's your worry? Finals are my favorite. It's a quick 150 bucks. I use to do a lot of new contruction. My favorite house was this one where the guy was doing it himself. He took 15 draws. 15 inspections for me.

 

[Noreen]

It is my understanding the the primary lenders processing, underwriting and funding the 203K programs are BOA, Wells and PNC. Not every lender wants or has the expertise to do them. On the webinar I took on 2/24/2011 HUD stated that the appraiser does the final and confirms that the repairs as written and completed meet HUD minimum property requirements of "Safe, sound & Habitable. The appraiser is also to look for items that should have been completed to meet 4150.2 and were not included, if this happens, you must view it as what you would sign off on a typical inspection. The appraiser cannot do the disbursement inspections as "the appraiser cannot wear both hats on the same property". .

 

[Verne Hebert]

Contact HUD.

Never trust the lender.

B of A underwriters, specifically, have lied to me on more than one occasion with regard to the 4150.2, and process.

 

[Mike Kennedy]

It is my understanding the the primary lenders processing, underwriting and funding the 203K programs are BOA, Wells and PNC. Not every lender wants or has the expertise to do them. On the webinar I took on 2/24/2011 HUD stated that the appraiser does the final and confirms that the repairs as written and completed meet HUD minimum property requirements of "Safe, sound & Habitable. The appraiser is also to look for items that should have been completed to meet 4150.2 and were not included, if this happens, you must view it as what you would sign off on a typical inspection. The appraiser cannot do the disbursement inspections as "the appraiser cannot wear both hats on the same property". .

"The appraiser is also to look for items that should have been completed to meet 4150.2 and were not included,"

Assuming this means repairs/items above and beyond repairs noted/called-for in the appraisal report - does this then not also require a re-appraisal as the subject's physical characteristics reported were not accurate and additional items may affect both marketability and market value?

 

[Theresa2484]

From what I can tell on HUD's site, it's up to the lender's discretion and an appraiser can inspect. This is a streamline, with about $21,000 in work that was done. BoA says it's okay to proceed with a 1004D.

 

[Noreen]

"The appraiser is also to look for items that should have been completed to meet 4150.2 and were not included,"

Assuming this means repairs/items above and beyond repairs noted/called-for in the appraisal report - does this then not also require a re-appraisal as the subject's physical characteristics reported were not accurate and additional items may affect both marketability and market value?

The assignments I have gotten for these have been "As-Is" and "As If Complete" at time of the original on site appraisal "observance". And yes, when we go to do these finals, not only do we bring our original write up, we are looking to ensure that what should have been included/done to meet HUD guidelines has been completed. It is not uncommon with these to get there and they decided to finish the inside and want to finish the outside "after closing" which is a no no.... or they thought your "chipping peeling paint" requirement could wait, when we sign off, it must meet MPR. if it took over say 6 months, HUD requires a new appraisal but the lender is required to order it as such. If I know it has gone over the 120/150 window, I just PDF over the HUD Clip that applies. Saves an argument.

 

[JSmith43]

"The appraiser is also to look for items that should have been completed to meet 4150.2 and were not included,"

That caught my eye too, Mike. But, I was thinking in terms of double jeopardy:icon_mrgreen: Looking over the stuff already cleared implies some sort of property maintenance guarantee. They have them in reverse mortgages, but in 203K, I think the owner has the freedom to allow a bit of paint peeling on the parts of the property not covered by the proposed renovation.

Wait until HUD starts cracking down on homeowners with reverse mortgages. I can see the headline: "75 year old falls off ladder, trying to scrape & paint trim before HUD inspector reports his mortgage in default due to lack of maintenance." I am pretty sure there is an active reverse mortgage exterior inspection program, probably mostly for occupancy reporting at this time.