C5 vs C6

[mp2277]

I also posted this in urgent help needed.

I inspected a 115 yo house yesterday, a large 4000 sf home in an historic town. I do no do many C5 homes and rarely a C6. The C6 properties I have done are obviously in need of a bulldozer and a dump truck LOL. This is an FHA reverse mortgage situation. It is occupied. In a nut shell, serious roof issues and a bathroom ceiling fallen in, attic is showing water damage and possible mold. Severe peeling interior and exterior paint and crumbling/missing brick support pillars in the basement and crawl areas. I feel although occupied and not condemned by the municipality it is C6. It is a tough call. Advise appreciated, especially from anyone with experience appraising distressed properties. Thanks in advance!

 

[Zoe]

C6 and subject to licensed professional inspection provided to you. I would probably let lender know and say cancel and charge for cancellation depending on what lender wanted to do on proceeding.

Me, it would be subject to and I would let FHA lender know.

Most likely lender will put you on hold. I would not let lender off hook on paying for services rendered.

Let lender provide you with inspection from licensed and bonded contractor. Lender will have to pay for it.

 

[Zoe]

You need to pick up phone in that situation or text or email and keep your client informed. Your client will say stop or okay on what you need to complete appraisal assignment.

 

[Sadie]

I also posted this in urgent help needed.

I inspected a 115 yo house yesterday, a large 4000 sf home in an historic town. I do no do many C5 homes and rarely a C6. The C6 properties I have done are obviously in need of a bulldozer and a dump truck LOL. This is an FHA reverse mortgage situation. It is occupied. In a nut shell, serious roof issues and a bathroom ceiling fallen in, attic is showing water damage and possible mold. Severe peeling interior and exterior paint and crumbling/missing brick support pillars in the basement and crawl areas. I feel although occupied and not condemned by the municipality it is C6. It is a tough call. Advise appreciated, especially from anyone with experience appraising distressed properties. Thanks in advance!

I'm with Zoe on this. C5 is still considered livable. This sounds like health and safety issues. Its a reverse mortgage? Maybe call Senior Services if you think the owners are at risk.

 

[Dublin ohio]

From your description you hit the C6 trifecta. You have safety, soundness and structural issues

 

[Tom4value]

I have never done an appraisal on a C6 or even a C5 property. Why? Because those designations only apply to an appraisal for mortgage financing. I call the lender and describe the property and they cancel the loan; they can’t loan on a C5.

“What about rehab loans?” All but one client of mine wants those done “subject to”, so C4 or higher. The one client who wants an “as is” and a “subject to value” will waive the former if there are no comps. Going back to no lender lending on a C5, if my subject is a C5 they always grant the waiver.

 

[Sadie]

I have never done an appraisal on a C6 or even a C5 property. Why? Because those designations only apply to an appraisal for mortgage financing. I call the lender and describe the property and they cancel the loan; they can’t loan on a C5.

“What about rehab loans?” All but one client of mine wants those done “subject to”, so C4 or higher. The one client who wants an “as is” and a “subject to value” will waive the former if there are no comps. Going back to no lender lending on a C5, if my subject is a C5 they always grant the waiver.

Fannie will lend on a C5, with a cost to cure to C4. I don't think Freddie will. But always let the client know and make sure. When I have done these, I have made the appraisal subject to the bringing it up to C4.

 

[Tom4value]

Fannie will lend on a C5, with a cost to cure to C4. I don't think Freddie will. But always let the client know and make sure. When I have done these, I have made the appraisal subject to the bringing it up to C4.

Theoretically, that is what needs to be done and I have done “subject to” appraisals all the time for safety/health/functional issues. However, a C5 condition, by definition, means a lot of issues; far more than what a lender would deal with and they have always cancelled.

 

[mp2277]

I'm with Zoe on this. C5 is still considered livable. This sounds like health and safety issues. Its a reverse mortgage? Maybe call Senior Services if you think the owners are at risk.

"Maybe call Senior Services if you think the owners are at risk." First, not my place to do that. Secondly I have a spine and do not do anonymous reports, therefore I would be violating the confidentiality clause. And third, that suggestion is just weird.

 

[ZZGAMAZZ]

Fannie will lend on a C5, with a cost to cure to C4. I don't think Freddie will. But always let the client know and make sure. When I have done these, I have made the appraisal subject to the bringing it up to C4.

Do you determine the C2C to bring the condition up to C4 before notifying the client, and provide it with that info?