FHA Mpr

[rimrock]

I was just reading an FHA appraisal and have a question. An addendum in the report states the property meets FHA's Minimum Property Requirements, but elsewhere in the report it states it's subject to repairs and lists several items. I thought it should have stated the property does not meet FHA's MPR. Which is correct?

 

[Mr Rex]

Consider this, the value is subject to the repairs being made. Upon the repairs being made, the subject meets MPR.

 

[Mr Rex]

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.

 

[Mile High Trout]

If it's a HUD REO it's different. Because there is no party in place to affect repairs, all reports must be as is. Conveyance is different.

But the insurability statement indicates the potential purchaser availability. Any property which requires repairs through M&M servicers are always as is, with a caveat stating these repairs must be completed prior to financiability.

Sounds like the statement on meeting minimum requirements is a review knock item, or a boilerplate item improperly left in the report.

It should have read; all reports are as is, and any rating which indicates passing of condition is contingent upon completion of noted mandatory repair items, or something along those lines.

HUD REO reports confuse the heck out of some lenders, because they're never subject to, but still carry mandatory repair requirements prior to financiability. There is a separate set of ML's for M&M's, if that's what you're dealing with.