C5 Flooring and incomplete 1004D.. Help?

[Tom4value]

Hello.
I did an appraisal on a 70s rural raised Ranch refi.
Overall condition is C4 except for the flooring. About 80% of the upper level had plywood floors that the Owner was planning to re-floor with materials he had on site. The other 20% of the upstairs (2 bedrooms) had badly stained carpet (5 dogs and 1 cat). The basement bedroom also had badly stained carpet. I gave the home a C5 based upon the current state of the flooring mentioned. I specified in the report that the C5 items needed to be addressed and made the report “subject to.” This was Subject To flooring on the ENTIRE upper level except the bathroom, AND new flooring in the basement bed.
I did the 1004D today after the Lender told me all work was done.
New flooring was put in on the upper level EXCEPT FOR the two bedrooms with stained carpet. The basement bed was also NOT changed.
My original report was Subject To with a $245K value.
If the home were for sale now, I believe a typical buyer would require at least a $5K credit to cure the damaged carpeting in the two upper beds and basement bed.
How do I handle this now? With the original report submitted at $245K and a 1004D inspection that is not qualifying as at least C4 due to bad carpet?
Can I change the original report/value?
Do I say the items are not complete on the 1004D?
What is my best option?
Any advice or input is much appreciated! Thanks!

Not your problem! It is a lender problem. They cannot close the loan until you say the work is completed, 100%.

I have never done an appraisal with a C5 rating. By definition, if the appraisal is UAD, it is for a conventional/government loan and they can’t sell it with a C5. Therefore, if the property is in “C5” condition, I call it C4 and make it subject to the conditions that would make it a C4. As a result, if you made the appraisal “subject to” you should have called it C4 because your value was based upon those conditions being satisfied.