New build with temporary countertops

[cbeckerstix]

Hello..

I am a mortgage broker doing an FHA loan on a new build. Due to supply shortages / labor shortages, etc., the countertops the buyer ordered aren't going to be available for about 10 weeks. The builder is planning on installing "temporary" countertops (I'm guessing particle board) with the correct functioning sink and says they can get a C/O from the county and they have done this in the past. They are proposing to close on sale to the buyer and the countertops would be installed after closing. The lender I am going thru says that as long as the appraiser marks that the home as completed and it is as-is and not subject to repairs they are fine with it. The home would be complete other than the counters. Is this even possible?

Thanks for the input.

 

[Tiffany Gibbons]

Hello..

I am a mortgage broker doing an FHA loan on a new build. Due to supply shortages / labor shortages, etc., the countertops the buyer ordered aren't going to be available for about 10 weeks. The builder is planning on installing "temporary" countertops (I'm guessing particle board) with the correct functioning sink and says they can get a C/O from the county and they have done this in the past. They are proposing to close on sale to the buyer and the countertops would be installed after closing. The lender I am going thru says that as long as the appraiser marks that the home as completed and it is as-is and not subject to repairs they are fine with it. The home would be complete other than the counters. Is this even possible?

Thanks for the input.

Not without a final inspection with whatever counter tops are typical for the area, faux granite Formica, Quartz, Butcher Block, Granite, Corian, Soapstone, even Concrete in place. But that's just me, and I no longer do FHA. Good Luck!

 

[sputnam]

The dwelling would be complete and habitable per the county. It would not be complete per plans and specifications (assuming that the appraisal was based on plans and specs). It seems the questions are, 'Do you close the loan based on the county issuing the C/O or based on the appraiser's completion inspection?' 'If you close based on the C/O, knowing that the countertops are supposed to be replaced with better quality countertops, do you escrow until that work is complete?'

 

[J Grant]

Hello..

I am a mortgage broker doing an FHA loan on a new build. Due to supply shortages / labor shortages, etc., the countertops the buyer ordered aren't going to be available for about 10 weeks. The builder is planning on installing "temporary" countertops (I'm guessing particle board) with the correct functioning sink and says they can get a C/O from the county and they have done this in the past. They are proposing to close on sale to the buyer and the countertops would be installed after closing. The lender I am going thru says that as long as the appraiser marks that the home as completed and it is as-is and not subject to repairs they are fine with it. The home would be complete other than the counters. Is this even possible?

Thanks for the input.

yes it is possible. The better counters are a quality/cosmetic feature, but functional counter is all that is needed to satisfy FHA for a kitchen.
Have the appraiser disclose that owner plans to upgrade the counters after closing but the counters as of eff final inspection date are adequate and functional THE END.

 

[shrubberyvaluation]

I wouldn't say its completed per plans and specs unless it was. Could do the appraisal based on the temporary counters or the lender needs to do something similar with escrow like when landscaping is delayed due to weather.

 

[J Grant]

I wouldn't say its completed per plans and specs unless it was. Could do the appraisal based on the temporary counters or the lender needs to do something similar with escrow like when landscaping is delayed due to weather.

A lender doing an escrow is not the appraiser's concern.

The subject is complete and ready for occupancy.

 

[Dublin ohio]

The subject is complete and ready for occupancy.

But not complete per plans and specs.

 

[Terrel L. Shields]

I was thinking FHA has a minimum of unfinished work that can be reported as complete. Call the direct endorsement underwriter

 

[J Grant]

But not complete per plans and specs.

So just write complete per plans and specs but borrower agrees to close with a base quality counter top with the better counter top to be installed at a future date after closing.

This does not have to turn into a big deal, unless an appraiser thinks it is better to hold up a closing for months and have borrower pay to live out of a hotel because of a counter top ( sarcasm )

 

[shrubberyvaluation]

So just write complete per plans and specs but borrower agrees to close with a base quality counter top with the better counter top to be installed at a future date after closing.

This does not have to turn into a big deal, unless an appraiser thinks it is better to hold up a closing for months and have borrower pay to live out of a hotel because of a counter top ( sarcasm )

How does that make sense. The appraiser doesn't hold things up by reporting the truth. The lender can decide what to do. We can either appraise it as having the temporary counters or we can say its not complete per plans and specs and is only missing countertops. Saying its complete when its not is not something I would do. If lender can't figure it out that is their problem.