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FHA refinance-repairs?

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Neil Melby

Junior Member
Joined
Mar 17, 2002
Professional Status
Licensed Appraiser
State
South Dakota
Am starting to do a lot of FHA again. I have an FHA refinance. Back in the day, I remember that I think we called for repairs only on flaking paint on an FHA refinance. Is that correct, and is it still true. I have some worn and missing shingles on this property, I could address them under the marketability issue.
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Everything in the 5140.2 Handbook, revised Appendis D, Mortgagee Letters 2005-34 and 2005-48 apply to a refi as well as a purchase. There is no difference. How long has it been since you have done an FHA appraisal? Flaking paint is to be conditioned if the house was built prior to 1978. Missing roof shingles should be addresses as a repair item anytime. How worn are the shingles? Remember two years REL for a roof. If there are three layers of shingles, then all three layers have to be removed. You really need to read HB 4150.2 and the revised Appendis D several times before you do another FHA appraisal.
 

Neil Melby

Junior Member
Joined
Mar 17, 2002
Professional Status
Licensed Appraiser
State
South Dakota
Thank you so much for pointing out my shortcomings. To answer your question, I have been doing FHA appraisals since 1992. Just to show you I am not hallucinating, I did find what I was looking for, though it does not apply in this case. I was thinking of an FHA STREAMLINED refinance, which this is not, it would have needed to be an FHA loan already, the streamline is designed to lower the monthly P & I on a current FHA insured mortgage. In the streamline, if an appraisal is required FHA does not require the repairs (except for lead based paint) to be completed, although the lender may require repairs beyond LBP. I used to do quite a few of these, and that is what I was thinking of (Ref Hdbk 4155.1, Rev. 4 Chapter 1, and Mortgagee Letter 1996-10. I have gone years without doing an FHA refinance, now it seems that the FHA refinance may be back in favor. I think that this was a good question, as many of us may start to see both FHA streamlined refinances and refinances into the FHA program as FHA is back in business after years of very low volume, at least in my practice area
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Neil, FHA made some fairly significant changes to protocol in 2005, via the mortgagee letters that RSW mentioned 2005-34 and 2005-48 which includes the revised Appendix D as an attachment. Here is another tid bit I found via a google search, a FAQ from 1/2007: http://www.HUD.gov/offices/hsg/sfh/appr/aprval.pdf

FHA is a changing all the time, the easist way to keep abreast is to subscribe to their update system. A lot of extra info, but you never miss the important updates:

Bulk subscriptions:

Some industry folks have asked, "How do I sign up my entire staff for FHA email updates?" It is easy... Just list your staff email addresses like this:

[email protected]
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You can send in one email address or thousands. Email your list to: [email protected]

If you have a mortgage or real estate industry friend who you want to subscribe to the national hoc reference guide mailing list, there are 3 other ways to sign up: 1. send them this link: http://www.HUD.gov/offices/hsg/sfh/ref/hsgregst.cfm they can sign up for the email list there; or 2: forward them this email; or 3: Visit: http://www.usa.gov/ and subscribe at: http://apps.gsa.gov/FirstGovCommonSubscriptionService.php

To unsubscribe - go to: http://www.HUD.gov/subscribe/index.cfm and click on "National Homeownership Center Reference Guide" and follow the unsubscribe instructions on that page.
____________________________________________________________________________________________

This is the FHA Single Family Housing listserv for real estate industry professionals that are interested in updates to Mortgagee letters, Notices, Guidebooks, Housing Counseling, FHA Reference Guide, Mortgage Limits, Career Opportunities, Grants, Contracting Opportunities & Housing Industry Training. Please visit us at: http://www.HUD.gov/offices/hsg/sfh/hsgsingle.cfm or visit our new homepage at: http://www.FHA.gov
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
All this time you've been telling us that you have the Appendix D engraved on your contact lense and now we find out you've been getting crib notes from Jerry Mayer?
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
I call him J. He calls me X.
 

Neil Melby

Junior Member
Joined
Mar 17, 2002
Professional Status
Licensed Appraiser
State
South Dakota
Mr. Rex,

I do have the HUD site on my desktop, and have copies of 2005-34 and 48 handy. See my post above and note the two types (streamlined FHA refinance and into the FHA program refinance) and I think you'll understand what my fogged 46 year old brain was trying to remember.
 

Mr Rex

Elite Member
Joined
Jan 12, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
Mr. Rex,

I do have the HUD site on my desktop, and have copies of 2005-34 and 48 handy. See my post above and note the two types (streamlined FHA refinance and into the FHA program refinance) and I think you'll understand what my fogged 46 year old brain was trying to remember.

4155.1 and 1996-10 are lender directed and shouldn't affect the way an appraiser reports his/her findings IMHO. Am I missing something?
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Thank you so much for pointing out my shortcomings. To answer your question, I have been doing FHA appraisals since 1992. Just to show you I am not hallucinating, I did find what I was looking for, though it does not apply in this case. I was thinking of an FHA STREAMLINED refinance, which this is not, it would have needed to be an FHA loan already, the streamline is designed to lower the monthly P & I on a current FHA insured mortgage. In the streamline, if an appraisal is required FHA does not require the repairs (except for lead based paint) to be completed, although the lender may require repairs beyond LBP. I used to do quite a few of these, and that is what I was thinking of (Ref Hdbk 4155.1, Rev. 4 Chapter 1, and Mortgagee Letter 1996-10. I have gone years without doing an FHA refinance, now it seems that the FHA refinance may be back in favor. I think that this was a good question, as many of us may start to see both FHA streamlined refinances and refinances into the FHA program as FHA is back in business after years of very low volume, at least in my practice area


That's exactly why you should read the documents.
 

Neil Melby

Junior Member
Joined
Mar 17, 2002
Professional Status
Licensed Appraiser
State
South Dakota
I think I see what you are saying. Even if an appraisal assignment is identified as an FHA streamlined refinance, you would call ANY repairs based on your understanding of 05-34 and 48, and then the lender would decide which to require, as FHA only requires LBP, but the regs say that the lender may require repairs to be completed, which they may if there is a safety or marketability issue which could be improved by completion of repairs.
 
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