"cost to cure" FHA

[Sandy Ward]

When doing an FHA appraisal...the property requires minor repairs, which you require on the appraisal....is it necessary to include an estimated "cost to cure" these minor repairs? The most recent info I can find on HUD site is 6 or 7 years old and I heard it's no longer necessary for repairs under a certain amount. THANKS

 

[CANative]

Of course it's necessary to provide an estimated cost to cure and the information is not 6 or 7 years old. It's right in Appendix D to the 4150.2.

 

[residentialguy]

No. You need to mention them in the condition comments and try to use comparable properties to find out the Market Value.

The only time you need C2C is when it needs to be cured.

 

[residentialguy]

Edit to above post. You said that you "required" these minor repairs. If they were minor, why did you require repair? With few exceptions, you don't require anything...the DEU does.

 

[Mr Rex]

From Appendix D:

This appraisal is made
Field Protocol
Mark this box
“subject to repairs
or alterations”
when the appraisal involves existing housing, or new construction more than 90%
complete with only buyer preference items remaining (floor coverings,
appliances, landscaping packages (soil must be stabilized to prevent erosion)),
requiring repairs or alterations to:
• Protect the health and safety of the occupants
• Protect the security of the property
• Correct physical deficiencies or conditions affecting structural integrity
• Complete buyer preference items for new homes, or to
• Complete repairs/improvements noted in work order or contractor estimates
for the Streamline K
• Meet FHA Minimum Property Requirements
The appraiser must indicate the extent of repairs and note this in the appropriate section of the appraisal,
or in the “additional comments” section, or in an addendum, under the heading of “Reconciliation –
Required Repairs” listing the repairs noted together with an estimated cost to cure.

 

[RSW]

Taken from the Revised Appendix D, Page D-2:

In the performance of an FHA appraisal, the appraiser must denote any deficiency in the appropriate
section(s) (site issues in the site section, improvement issues in the improvements section) of the
appraisal report. The appraiser is to note those repairs necessary to make the property comply with
FHA’s Minimum Property Requirements (MPR) or Minimum Property Standards (MPS) together with
the estimated cost to cure. The lender will determine which repairs for existing properties must be made
for the property to be eligible for FHA-insured financing.