If an FHA Appraisal is stuck for six months, is it not repairable?

[Crissa]

Given that a property can be repaired (by contract permission or by seller); does this change the FHA Appraisal that is attached to the house for six months?

I've gotten conflicting answers: One is that an FHA Appraisal cannot be changed for six months; the other is that issues on a property could be repaired.

Which is it? Or is it some weird 'both'?

-Crissa

 

[rzyzzy]

Given that a property can be repaired (by contract permission or by seller); does this change the FHA Appraisal that is attached to the house for six months?

I've gotten conflicting answers: One is that an FHA Appraisal cannot be changed for six months; the other is that issues on a property could be repaired.

Which is it? Or is it some weird 'both'?

-Crissa

I'm not an appraiser, but I have "lurked" here enough to give some cheap advice...

"both" is probably the best answer - even if it isn't very helpful...

The appraised value will be on the books for six months... It won't go up for any reason - you can google "FHA flipping rule" for the backstory on why the rule was made.

Nothing will "change" an appraisal, ever -except possibly a shady loan officer.

An appraiser can "correct" a legitimate error on a report, but they will not "correct" a report because someone fixed the roof and installed a toilet.

An appraiser can re-inspect a property if repairs have been made (the bank will likely ask for receipts from a licensed contractor as well - no duct-tape/bubble-gum repairs are allowed!:blush.

Be super-duper-double-dog careful if you're investing money for repairs in a house that isn't titled to you - even if you have a signed purchase agreement - those repair costs can become a gift to the property owner if your deal falls through, and no one needs that.

If the house needs more than a few hundred dollars in repairs, talk to your banker about the 203k "streamline" loan. If they don't know all about the program, find a banker that does - The repairs can be done after closing, and it's a much safer deal for the buyer.

Good luck!

 

[Webbed Feet]

Catch 22

Given that a property can be repaired (by contract permission or by seller); does this change the FHA Appraisal that is attached to the house for six months?

I've gotten conflicting answers: One is that an FHA Appraisal cannot be changed for six months; the other is that issues on a property could be repaired.

Which is it? Or is it some weird 'both'?

-Crissa

Answer post number two is very good. Well done!

What you need to understand is all appraisals are done as of a certain point in time. A specific day in other words. In your case, on the day of that appraisal, those repairs were NOT done! ... Sure, "issues" can be repaired and then after that a demanded repair by an underwriter to a "Safety" issue, for example, might then qualify the property for the loan. The hitch is, very many lay people completely confuse "Appraisal" requirements with "Loan/Underwriting" requirements. These are not the same thing! ... To go back to an appraiser a month later and ask for a new analyses of the property, after the property has now been altered via repairs, is asking that appraiser to perform a new real estate appraisal at a new point in time. A new day. But oops! FHA forced that prior appraisal on that property for six months, and appraisers are NOT allowed to go back and turn that prior appraisal into a misleading one by making it appear as if those repairs were done on a date that they were NOT done on!

And, I'd like to add, that what has turned into a "Catch 22" issue has NOT been caused by the real estate appraisers. It has been directly caused by a combination of what I personally think is a really dumb FHA rule and a bunch of really dumb lenders / loan origination staff types / and the other real estate professionals involved. Facts are, after FHA that is, NONE of the remaining players want to see "Subject To" conditions being called for by real estate appraisers. Why it might mess up the deal!!!! So instead of appraisers calling for repairs and opining a value "As If" the repairs are already completed, we are pressured or literally demanded to only provide "As Is" appraisals that then result in lower opinions of value out of us due to opining a value based on no repairs being done. FHA has jumped on this "As Is" bandwagon by altering her rules to today no longer requiring FHA appraisers to call for repairs that we used to have to call for as a part of the appraisal under "Subject To" conditions that would have often caused a higher opinion of value as a result.

If you grasped the meaning of all of the above. I just really wanted to point out that it was NOT the appraisers that created this mess or altered the playing rules. It was everyone else. Now the rest of you are all stuck with what you get for six months. In the past this was not so horribly unfair to sellers as it is today, when all the sub-prime (not FHA) loans were available for buyers. Today, now that FHA is the new "sub-prime" (Sorry FHA... Admit it!!!) ... and bunches of buyers cannot qualify for other conventional loans.... Catch 22.

 

[Crissa]

Okay, so the repairs can be done to fix the safety-health issues, but the result price cannot be altered for the time period.

Check.

This was very informative! Thank you!

-Stacey