Worried about FHA approval after Appraisal

[Anonymous]

So, my home buying process has been slow. In June of last year I went full swing into reparing my credit, disputing items paying for deletes and so forth until finally i could apply for a mortgage. Come March, made an offer, came in at 204k with 4 seller concession. After inspection we renegotiated and askes for some repairs and negotiated the price again. I knew this was a livable diamond in the rough. Kitchen upgradea over time, expanding bathroom adding a powder room. Updating sunroom. And so forth. 

Provided my mortgage  broker with all documents, that were conditions of approval last week (he wanted to wait for underwriter to return from vacation to ask me for the stuff, so I had some harsh words and and demanded it)

So today, I get the appraisal, home value is good matches what ths original home offer was. However my concern is there are some repairs listed on there on the appendex, some are what we had negotiates after inspection. Others I planned to do myself over time. 

So my estimated date of close is the 24th if May. Im nervous FHA will mandate these all get replaced or not fund my house. Its things like fix garage door, replace boarded window in basement, repair sections of deck that may have rotted planks.

Im screwed arent I? Seller isnt going to want to do these. The underwriter sent me the appraisal, she didnt say anything demanding repairs.. what do u all think

[ShanetheMortgageMan]

Look on page 2 of 6 of the Uniform Residential Appraisal Report and see if the home was appraised "as is" or "subject to following repairs..."

If it's "as is", then the repairs shouldn't be required to be done prior to closing. 

If it's "subject to following repairs..." then the repairs will need to be done prior to closing or you can switch your loan type to an FHA 203(k) rehab loan and finance those repairs.

The garage door, replace boarded window, and repair sections of deck all sound like items that would be required to be dealt with in some form or another prior to closing.

You'd be surprised what sellers are willing to do to sell a home.  None of those sound very expensive to me, assuming the garage door issue isn't major.

[Anonymous]

The box checked says: subject to the following repairs or alterations on the basis of a hypothetical condition that repairs or alterarions have been completed.
He gave a sales comparison approach appraisal. And then a cost approach (if developed) amount.
Conditions of Appraisal
-Subject to the following;
1) Find cause of standing water in the basement and rectify problem.
2) Replace baseboard in bathroom.
(negotiated after inspection, seller fixing)
3) Repair/replace bathroom tiles walls wherever patched or covered and tile missing.

(negotiated after inspection, seller fixing)
4) Repair garage door.
5) Remove debris from exterior.
6) Repair/Replace missing and/or twisted leaders, gutters, downspouts
(negotiated after inspection, seller fixing)
7) Replace/Repair broken and boarded window.
8) Replace any rotted sections of exterior decking and enterior wood steps.
9) Visible signs of water damage on enclosed porch ceiling, walls & floors. Therefore subject to roof
certification and repair/replacement of any rotted sections on ceiling, flooring, walls and trim.

Thoughts?

[ShanetheMortgageMan]

Well, bad news is all of those will need to be addressed prior to closing.  Good news is the seller has already agreed to several of them and the other ones may not be very major.  My suggestion would be to contact your real estate agent tonight and ask how best to approach the appraiser required repairs.

[Anonymous]

My agent has been the best. Contacting me before I even got the appraisal, she told the broker from the beginning this should have been a conventional loan. But he kept saying well lets see what happens and if its denied by FHA we will do conventional. Like who has time to play games? I sure dont.

[ShanetheMortgageMan]

They can probably flip it to an FHA 203(k) rehab loan if the seller is unwilling to address those items.  I'm sure it'll work out one way or another.

[Anonymous]

I Guess I, just wait for the underwriter/broker someone to tell me whats next 😔.. Ill update when I hear more. Thanks Shane. Im.in NJ by the way..The appraisal also rated the house as a C3 on the report