FHA Drywall Requirements From The Horse's Mouth

[Paul Ness MAI]

For those following my drywall saga...

I got an email reply from Gerry Glavey, the director of HUD in Phili who said..."on an existing property, HUD/FHA requires that there be a wall separating the garage area from other areas of the property. However, we do not have minimum standards with respect to the fire-rated drywall".

So, to paraphrase an infamous president, it all depends on what the definition of the word 'wall' is. 8)

We have finally received a copy of the VC sheet and found out it also calls for the wall to be drywalled between the living area and garage, makes sense. I have placed a call to the appraiser to find out his personal specs on the drywall, since HUD has none and neither does our municipality, so we can get appropriate repair quotes. However, he has not returned my call :evil: . I am going to ask our realtor to try and contact the appraiser. Maybe she'll have better luck. I believe the appraiser should let us know what he is going to require when he reinspects. I sure don't want to spend the money and not have it suit the appraiser.

We asked our realtor to find out if the buyer would split the cost and they said absolutely not. So if the repair costs are prohibitive, we are prepared to walk away.

 

[Pamela Crowley (Florida)]

Paul,

You have an answer, in writing, from FHA. Just put up the drywall where necessary in a professional manner and get on with it or, go on to the next deal. You may be liable for the buyers expenses if you choose to kill the deal. Read your contract again and make sure you understand all of it. I've seen a few sellers that got fed up with the whole mess and ended up paying for it.

The appraiser cannot communicate with anyone except the underwriter per FHA Handbook. Now you know why so many lenders, Realtors and Appraisers are not doing FHA financing anymore. There are now many Realtors advising their sellers not to accept an FHA financing offer. The whole thing has become outrageous - like a sick cosmic joke. It would have made so much more sense if FHA had made it necessary to have a home inspection by an ASHI certified inspector and left the appraiser to their job normally.

Please do keep us posted. Another terrible learning experience. You have my sympathy.

 

[Paul Ness MAI]

I think someone should be able to communicate with this appraiser to find out what he will require, since he is GOD in this situation. I'l re-read the contract, but I'm 90% sure in PA if the seller refuses to pay for repairs, the contract is null and void.

You are right about FHA. I already told my realtor I will never again entertain an offer from someone using FHA financing.

 

[Anonymous]

Get on with it already! Materials for this job are going to cost you about $150.00 tops. I guarantee you have spent that much in lost appraisal time typing replies to this topic.

Let's go! Chop! Chop!

 

[Brad Pack]

Hello Pam.

Your comments regarding the FHA appraiser/DEU communication are correct and consistent with 4150.2, 1-2 C. I recently had a listing agent attempt to contact me via numerous phone calls. I alerted the DE as to what was going on, yet, the calls continued. Called a friend at HUD who called the DE and explained proper protocol procedures in no uncertain terms. The calls abruptly stopped.

Explain to me what the FHA appraisers "normal job" is. Did the FHA appraisers role/duties changed under the Homebuyer Protection Plan and the 4150.2? What exactly was the FHA appraisers role prior to the Homebuyers Protection Plan?

Thanks!

 

[Pamela Crowley (Florida)]

Explain to me what the FHA appraisers "normal job" is. Did the FHA appraisers role/duties changed under the Homebuyer Protection Plan and the 4150.2? What exactly was the FHA appraisers role prior to the Homebuyers Protection Plan?

Brad,

The FHA appraisers role prior to the Homebuyers Protection Plan was pretty much the same. Appraisers need to address whatever they see that could cause a problem no matter what the appraisal is for. FHA puts excess liability on appraisers for things we are not experts in. I spend at least an additional 1/2 hour after I've done my 'normal' inspection going through the house doing all the extra FHA required inspections. FHA should have just demanded a home inspection and not put the liability on appraisers - many years ago.

I recommend additional inspections for any item I notice no matter what kind of financing is involved. Outside of a FHA appraisal, if I really believe there could be a major problem, such as a bad septic system, a noisy and old heat pump, stains on ceilings, etc., I recommend further inspection by a qualified professional in that field and make the report 'As Is' with the hypothetical condition that the item noted is fully functional. I report what I see, what I think about it and make recommendations. It's then up to the underwriter to decide what they want to do. Of course, for FHA it's all on the VC with requirements and recommendations where necessary.

The biggest problem I see is that FHA asks too much of the appraiser with confusing guidelines/requirements that are too often subjective. Along with this, there are way toooooo many appraisers that don't do their job properly and practically no one is doing anything about it. The fact that the appraisers that do their job properly are blackballed is a huge issue. The fact that really good appraisers could (and sometimes are) taken down by a USPAP violation of wording that has nothing to do with the quality of the appraisal and report is horrible. Meanwhile, the 'make whatever number you tell me without any mention of defects' appraisers go on their merry way because the loan officers love them.

FHAs requirements for appraisers are bad now and were bad before 4150.2. I am aware that they are pretty much the same.

Thanks for asking. I enjoy your informative posts and appreciate what you have taught me here.

 

[Ben Vukicevich SRA]

Paul,

Now ask Gerry if the garage is supposed to be fume-proof also..........You don't have any heat vents in the garage do you?

But that's another story for another day...........................and we don't want to complicate matters anymore than they already are.

Good luck in your move.

Ben

 

[Brad Pack]

Along with this, there are way toooooo many appraisers that don't do their job properly and practically no one is doing anything about it. The fact that the appraisers that do their job properly are blackballed is a huge issue. The fact that really good appraisers could (and sometimes are) taken down by a USPAP violation of wording that has nothing to do with the quality of the appraisal and report is horrible. Meanwhile, the 'make whatever number you tell me without any mention of defects' appraisers go on their merry way because the loan officers love them.

Pam,

I totally agree!

 

[Larry Lyke]

Just to add a little fuel to this fire:

Make sure you use fire-rated sheetrock on the appropriate walls or ceiling of the garage.

Even if there're no local code, I would suppose that the state has a building code. If none, then they are probably deferring to the national code.

It's certainly a very simple job and quite inexpensive.

 

[Paul Ness MAI]

It's simple when the house is being built. It's not simple when there are HVAC ducts that need to be framed out across the ceiling and the furnace is six inches from the wall that also needs drywalled... also a garage door opener that has the chain track mounted above the bottom of the floor joists (actually up between the joists) because the ceiling is too low and the garage door could otherwise not be raised. It's also not easy because when the garage door goes up it barely clears the bottom of the floor joists and it may bump the drywall.