A/C and Heat requirements on Conventional loan

[Mountain Man]

I recently completed an appraisal for a conventional loan. The Central A/C and Heat were not functional so I called it out to be repaired. The borrower insists on conventional loans the A/C and heat do not have to be operational? Is this the case. I am under the impression that not having functional heat the property is not habbitable?

Sorry, but unless it's a local code you are in the wrong. FHA or VA yes, but not for conventional. You just report, make adjustments and let the UW decide.

 

[Bill Streep]

I'll agree with most of the above. Unless your client has indicated otherwise in their engagement letter, provide a cost to cure, adjust for it in condition, and value it "as is".

 

[CANative]

Sorry, but unless it's a local code you are in the wrong. FHA or VA yes, but not for conventional. You just report, make adjustments and let the UW decide.

Agree with this and similar opinions.

But wait... What about the question on Page 1 of the form: Are there any conditions that adversely affect the LIVABILITY, soundness or structural integrity? It seems like a non-functional heating system might adversely affect the livability and this would trigger a repair condition.

Thoughts?

 

[Mr Rex]

Wouldn't no heat or A/C result in a C6 condition rating, which in turn requires the report to be "Subject to"? C5 says The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains
useable and functional as a residence Is a house with out HVAC "useable and functional as a residence" year round in most climates?

 

[Scott R Marshall]

Wouldn't no heat or A/C result in a C6 condition rating, which in turn requires the report to be "Subject to"? C5 says The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains
useable and functional as a residence Is a house with out HVAC "useable and functional as a residence" year round in most climates?

Guess it depends if you live in an area where you need heat. And then it would still probably be habitable for portions of the year. Just another UAD thing that the powers that be mandate probably along the lines of what you implied, meaning C6, which is clearly misleading.

As for A/C, I appraise many homes without A/C systems that are market accepted, as the need for cooling maybe occurs for a month out of the year, if that, and even then only for a couple of hours out of the day.

 

[CANative]

There are only a few areas in the US where heat is probably not needed. Hawaii, parts of Florida perhaps.