topic Re: FHA Inspections in Mortgage Loans

FHA Inspections

Anonymous — Mon, 23 Mar 2009 19:33:48 GMT

I know that FHA can pick apart weird things about a house and ignore other things that actually do need attention. We have some friends who got an FHA loan and were told they had to paint around the window frames for FHA to approve it, and then after they moved in there ended up being major foundation problems that the inspector had made no mention of. So we were prepared for that when we looked at houses, and took it into consideration. We're under contract on a foreclosure that's in surprisingly good condition, but all of a sudden the lender and realtor are acting like maybe we shouldn't even bother getting the inspection because it's hard to get FHA to pass a foreclosure. I just think this is weird...I know they may find some issues, but isn't it worth trying? The realtor was surprised by the good condition when we saw it with her...so I'm confused as to why all of a sudden they're acting like it's a problem, even though the inspection hasn't even happened yet.

Has anyone had to pass on a house because of FHA inspections? Or any other stories to share? I'm just waiting to hear back from the realtor...she was calling the selling bank to see if they'd even be willing to work with us with an FHA loan...seems like we should have checked on that sooner, since we're under contract! I've been saying all along that we'd be FHA, so I just don't get why it's suddenly a problem!!

Re: FHA Inspections

Anonymous — Mon, 23 Mar 2009 19:43:07 GMT

I'm going FHA and i've seen about 15 houses. They have ALL been forclosures and honestly there isn't a whole lot in my price range that weren't bank owned forclosures. My sister bought an older forclosure that needed quite a few repairs to be able for her to buy it. the bank did all repairs with no questions asked.

My realtor told me even if you go conventional, anything that affects the health and safety of the persons buying the house needs to be fixed by the seller. The only reason it wouldn't need to be fixed is if they wanted cash offers only on the property. Cash offers could buy in as-is condition.

Whether any of this is actually correct or not, i don't know, but this is what i have been told.

Re: FHA Inspections

Anonymous — Mon, 23 Mar 2009 19:44:51 GMT

Okay, I should specify that this is as-is, so the seller won't make any repairs. The only thing my realtor thinks they'd be willing to do is termite treatment if it was deemed necessary, just because no lender, FHA or otherwise, will finance a house with termites.

Re: FHA Inspections

Anonymous — Mon, 23 Mar 2009 19:52:23 GMT

We recently had one member that went through h*ll and back to get to closing on an FHA loan. I actually had a big debate on this, but eventually Dallas set me straight. As much as I don't believe it is right and I still think that it's not their job and they are not particularly qualified to do so, it seems that appraisers on FHA deals are used as somewhat of an inspector, too. There are many things that must meet FHA standards that don't come up in Conventional financing and it seems that the FHA appraiser is leaned on to make sure that the property is in compliance. IT CAN be a huge hassle. You should be prepared to make repairs as necessary to the house if the bank is not willing to do so. You basically are at risk of losing money on repairs you may have to make on the home in order to get your financing. Should the deal fall through for any reason, you would be out any money you put into the home that is not yet yours. This is where there is a big issue in my book...to expect buyers to put money into a home they do not yet own, is very risky and bad business. However, it appears that many deals will never close if the buyer isn't willing to do so. When you are in an area full of foreclosures and it's all you can find in our price range, you are sort of stuck...either take the chance or don't buy (unfortunately).

Are you able to go conventional? That would make it easier, but you still have to cross hurdles.

Re: FHA Inspections

Anonymous — Mon, 23 Mar 2009 19:59:31 GMT

Right, we knew going into it that the FHA people would likely be picking things apart. We're willing to do anything minor that we can to help get it approved...my dad's a handyman by trade and could help us out a lot pretty easily, unless it was something major, in which case we'd probably not tackle it and just move on.

Conventional just isn't an option for us. I think my realtor was holding out hoping we could go conventional, but I told her I really didn't think it would happen, so as much as I like her, I'm frustrated that she didn't listen to me and is just now saying this might be a deal breaker.

Re: FHA Inspections

Anonymous — Mon, 23 Mar 2009 20:17:41 GMT

Yes, I can see where you are coming from. That would be very frustrating to me as well. When you are upfront about something from the get go and they don't listen, only to have them come back and tell you it may be in issue IS annoying...and frankly...maybe a waste of your time. Maybe you should have a talk with your agent and politely call this matter out onto the table? Atleast then it won't be an issue moving forward?

Re: FHA Inspections

Anonymous — Mon, 23 Mar 2009 20:53:38 GMT

I should, but I'm a wimp. And she reminds me a lot of my grandma, so it's hard for me to be mad at her! hehe...I'm just hoping she figures something out.

Re: FHA Inspections

Anonymous — Mon, 23 Mar 2009 21:04:29 GMT

Don't be a wimp. Even if you just say something along the lines of "You know Ms. Sweet Grandma Realtor, I'm surprised this is an issue now, we discussed that I had an FHA loan from the beginning and I didn't get the feel that it was going to be a problem. Has something changed?"

Re: FHA Inspections

BBYGRL — Mon, 23 Mar 2009 23:57:24 GMT

I was approved for a FHA loan in Jan. Although I clearly need some roof work, they didn't mention it. Their only request was to fill in the hole where the dishwasher belongs. I bought one 4 days before I closed. Go figure?

Re: FHA Inspections

BBYGRL — Mon, 23 Mar 2009 23:58:58 GMT

@Anonymous wrote:
Okay, I should specify that this is as-is, so the seller won't make any repairs. The only thing my realtor thinks they'd be willing to do is termite treatment if it was deemed necessary, just because no lender, FHA or otherwise, will finance a house with termites.

Mine was as-is as well. The bank did replace the water heater, did the termite treatment and gave me $2k back for the roof.

Re: FHA Inspections

Anonymous — Tue, 24 Mar 2009 00:08:20 GMT

@BBYGRL wrote:
@Anonymous wrote:
Okay, I should specify that this is as-is, so the seller won't make any repairs. The only thing my realtor thinks they'd be willing to do is termite treatment if it was deemed necessary, just because no lender, FHA or otherwise, will finance a house with termites.

Mine was as-is as well. The bank did replace the water heater, did the termite treatment and gave me $2k back for the roof.

Well that's good to hear. Thanks! Still waiting to hear back from my realtor, so I don't know where we stand right now. I think it's worth sneaking in a few days before the FHA appraisal and trying to take care of any red flags, but we'll see!

Re: FHA Inspections

GFer — Tue, 24 Mar 2009 00:11:44 GMT

I'm closing FHA on a bank owned forclosure this Friday. All the banks are different in how they handle these. I found that out firsthand, as this is my 7th contract (only two were not bank owned). Not my choice, but like others, I couldn't afford much more.

The reason banks hate forclosures and FHA in the same sentence, is that usually the homes in forclosure are in less than habitable shape. FHA has actually loosened their standards are not nearly as picky as they used to be. You should be too, as really, it's for your own safety (and pocketbook).

While 'most' banks won't come out of pocket for anything, some will. Can't hurt to ask! And if you look long and hard enough (been there, done that---almost a year!) you will find the one that's right for you.

And as everyone will tell you; all the FHA lenders are different in what they will and won't accept. So don't base putting a contract on a home you like on someone 'else's' experiences.

Re: FHA Inspections

Anonymous — Tue, 24 Mar 2009 04:32:04 GMT

GFer:

__________________________________________________________________________________

GFer, this is your 7th contract?! Is that over the years or just recently trying to make a purchase?

I'm hoping you don't tell me that 6 prior contracts have fallen through!

I want to buy later in the year and foreclosure + FHA are definitely the way I want to go.

Re: FHA Inspections

Anonymous — Wed, 25 Mar 2009 01:38:48 GMT

If doing a refi thru FHA, does an inspection need to be done if the current loan is not FHA?