USDA Direct - Required Repairs - Help ASAP!

[DanTheMan77]

I just got my letter from USDA saying the appraisal came in at our offer price. Unforunately, this means we won't be able to wrap in closing costs. Not a big deal since we can cover those. However, under the list of required repairs it says that the entire interior of the house (including inside the garage) needs to be painted. I have no idea why they are requiring this... I think there was a comment on the appraisal that said "interior needs painting" or something to that effect, but I'm not sure. There is no issue with the interior that would make me think it needs to be painted. The drywall is in good shape and all of the rooms have been painted within the past few years. One is an odd color, but I don't see that being a "required repair".

I checked around and it seems like this is going to cost $3,000 to $5,000 to have done. Does anyone know if the USDA will allow me to do this work? I'm trying to avoid calling the USDA office since I wound up getting into an argument with the lady this morning over the low appraisal and the fact that they ordered it before we even had a finalized contract.

[ShanetheMortgageMan]

I am not 100% certain, but I'd guess you'd be OK to do the work.  The only time I ever see DIY work being prohibited is with certain lenders for their rehab programs (FHA 203(k), HomePath renovation, or HomeStyle renovation)... all other situations the lender is OK with the work just being done.  Like for example last week I had a transaction where the garage door opener was faulty, we didn't care who did installed a new one or paid for it.

Do you have an email for the gal at USDA you are working with?  Sometimes it's just better to send them an email for small stuff.

[DanTheMan77]

That's good to know. I can't see why they would want it painted. It's in pretty decent shape. Honestly, the inside is nicer than any other house I have lived in.

I have an email in my draft box to her... I was just holding off on sending it since I probably need to reword some of it. I was still P.O.'ed when I wrote it, and will probably regret sending it before I cool off.

[ShanetheMortgageMan]

That is what I do when I am upset with someone (underwriter, appraiser, etc.) too, I write an email to get all of my anger out and don't send it... come back after I've settled down and edit it.  It allows you to blow off the steam but also be professional about the situation.

If you have pictures of the property, I'd include them in the email and ask what specifically about the home made them require it to be re-painted?  Is the home old?  I wonder if they think there is lead interior paint or something.

[SSTO]

I'm closing on my USDA Direct Loan on Friday (got the clear to close yesterday), but I had the same problem.  My appraisal came back $5,000 less than my contract price.  They originally had me having to have repairs done, but they gave me the loan for the full contract price with no closing costs included and no required repairs.  No required repairs shocked me because the circuit breaker is double tapped, there is some minor mildew in the basement area where the washer/dryer go, and the ventilation in the bathroom was working marginally.  There were a few other things, but they required none of these to be fixed for me. 

I'm just bummed because I really needed my closing costs rolled in and now have to get money from my family.

Good luck with your loan! 

[DanTheMan77]

SSTO, I'd be interested to know how you got them to change the repair requirement. And congrats on getting to closing... this is such a long process, I don't know if I'll ever get there.

I cleaned up my email and sent it off to the USDA. She replied that as long as the repairs were "cosmetic" and didn't require a licensed professional to perform them, they were OK with me doing the work myself.