Poor Drainage Around Foundation On Conventional Loan

[pdaniel7]

Hello everyone. I was hoping to get some clarification on the proper way to handle inadequate drainage from the foundation on a conventional loan. The home has not been very well maintained and has a fair amount of deferred maintenance, but I would be able to perform the appraisal "as is" because I can well demonstrate the market reaction to similar deferred maintenance items with the comparables. The problem is that the rear patio is clearly slanted toward the foundation and would allow water to pool. Clearly, I need to note it in the report, but am I required to do the appraisal "subject to" an inspection by a qualified expert to determine if it is indeed a problem and requires repairs? It is extremely unlikely that I am going to be able to locate a comparable that verifiably has similar drainage issues. If this were FHA, I would have no problems. However, I have not encountered this on a conventional loan before. What say you? Thank you for your help.

 

[Randolph Kinney]

Do you see cracks in the foundation, walls, doorways and windows (corners), floors uneven? If you don't see any visible signs that would indicate you have a problem with settlement or unstable soil, I would note it as-is with the caveat that if there are concerns about the issue that a qualified expert be engaged to determine the exact nature and extent of the issues noted.

 

[pdaniel7]

Do you see cracks in the foundation, walls, doorways and windows (corners), floors uneven? If you don't see any visible signs that would indicate you have a problem with settlement or unstable soil, I would note it as-is with the caveat that if there are concerns about the issue that a qualified expert be engaged to determine the exact nature and extent of the issues noted.

That's what I thought as well since I could not find anything in the Fannie Mae guidelines that address drainage around the foundation; just if the foundation appears damaged. In my case, there were no obvious signs of damage to the main structure of the home, but then again, I am not a structural engineer. Thanks for your help.

 

[Amy Perkins]

That's what I thought as well since I could not find anything in the Fannie Mae guidelines that address drainage around the foundation; just if the foundation appears damaged. In my case, there were no obvious signs of damage to the main structure of the home, but then again, I am not a structural engineer. Thanks for your help.

Water will go to the lowest point, maybe it seems like it would be a problem but it's not. State your concern regarding the drainage, state that there are no obvious signs of unstable soil conditions, state that you are not a structural engineer and bracket everything else including condition. If the lender wants to call out a structural engineering report to do the loan, they are welcome to; you may even recommend they have one done if it makes you feel better.

 

[Terrel L. Shields]

, I have not encountered this on a conventional loan

I wish you would be a little more specific about what loan program you are in. Conventional means what? Fannie? Freddy? A private investor? Non-bank like Quicken? Or, just an in house loan held by a regulated bank.

So whose rules apply? In house likely wants as is, period. And secondary market loans may require cost to cure. Go back to your lender and ask then how to approach it and what guideline apply.

 

[ramrcdk]

I wish you would be a little more specific about what loan program you are in. Conventional means what? Fannie? Freddy? A private investor? Non-bank like Quicken? Or, just an in house loan held by a regulated bank.

So whose rules apply? In house likely wants as is, period. And secondary market loans may require cost to cure. Go back to your lender and ask then how to approach it and what guideline apply.

TRUE that: What's THE Scope? Report what you see, right? Comment & leave it UP to the lender to decide on further inspections with the Assumption that "same" does not
impact or influence your Reconciled Value = AS -IS....if if that is The Scope. The cost-to-cure...is that in your "wheel house" of expertise?

 

[Restrain]

Do you have a basement? If so, the impact on standing water can be significant. If you are not seeing water penetration into the home, water below the foundation top, comment and photo. Let the client determine.

 

[pdaniel7]

TRUE that: What's THE Scope? Report what you see, right? Comment & leave it UP to the lender to decide on further inspections with the Assumption that "same" does not
impact or influence your Reconciled Value = AS -IS....if if that is The Scope. The cost-to-cure...is that in your "wheel house" of expertise?

This will be Fannie for sure. You raise a good question about the cost to cure being within the realm of my "wheelhouse" of expertise. If the patio were a relatively solid piece, I would be able to make a fairly accurate cost to cure with mudjacking, but the section of patio along the house is fairly broken up. I'm not sure that it could be mudjacked. I believe I will be able to adequately use detailed commentary to explain my findings and do the appraisal as-is (as requested by the client), recommend an inspection by a qualified expert if the lender has concerns, and reserve the right to re-evaluate the value if I am made aware of any structural issues or required repairs found by an expert.