Repairs in FHA appraisals

[Fernando]

I don't do that many FHA appraisals and usually they are "clean" properties.
I got this order and it's a sale and contract indicated $50K for repairs credited to buyer.
I don't know how to deal with such extensive repairs. Is this too complicated for me?

 

[andrew81]

Yes

 

[RSW]

Sounds like it may be a good property for the 203k program.

 

[Fernando]

Sounds like it may be a good property for the 203k program.

I heard of this thing called 203K program. I think I'll pass on this order.

 

[glenn walker]

Let me ask you this ? How would it physically meet ( MPR ) no matter how much the seller credited the buyer ? It cant and its BS- Its called a FHA 203K Program - But you just made up this scenario as this is not the way it works in FHA Land.

 

[ValueArtist]

203k assignments require As-Is and As-Repaired value opinions.

 

[Tom4value]

Sounds like the LO and realtor don’t know their stuff! Sales concessions are for closing costs and pre-paids ONLY. They can never be for repairs. This cannot go FHA 203b nor conventional. The repairs either need to be done before closing (appraisal “subject to”) or some type of rehab loan product. Either way, the P&S needs to be written without the $50 k concession.

 

[ZZGAMAZZ]

Sounds like the LO and realtor don’t know their stuff! Sales concessions are for closing costs and pre-paids ONLY. They can never be for repairs. This cannot go FHA 203b nor conventional. The repairs either need to be done before closing (appraisal “subject to”) or some type of rehab loan product. Either way, the P&S needs to be written without the $50 k concession.

Thanks for your insight; please clarify: Are you saying that the sales contract for a FHA loan can't include concessions for repairs? And do we know if the $50K in concessions accurately reflect the outstanding curable physical maintenance? {Or is that the point of this thread and I just don't realize it????)

 

[J Grant]

I don't do that many FHA appraisals and usually they are "clean" properties.
I got this order and it's a sale and contract indicated $50K for repairs credited to buyer.
I don't know how to deal with such extensive repairs. Is this too complicated for me?

We appraise the property, not the contract.
Ask the RE agent to specify what exactly the "repairs " consist of. If the property really has that many defects, likely it will not qualify for the regular FHA loan, which limits repairs to I believe 5k or under.
Find out what the repairs are, to see if they really exist or are just a form of providing a down payment/discount to the borrower.

You could then discuss with lender before going to inspect, or just go and inspect and see for yourself what the repairs look like at the property compared to what the RE agent said they are. You would have to make the appraisal subject to repair for health and safety defects. After that, out of your hands -wrt their deal or loan outcome.

 

[Ariba]

I don't do that many FHA appraisals and usually they are "clean" properties.
I got this order and it's a sale and contract indicated $50K for repairs credited to buyer.
I don't know how to deal with such extensive repairs. Is this too complicated for me?

1) That is a good thing. From your previous posts, everything is too complicated for you. This appraisal however is way outside/above your level of competency.