FHA property condition requirements.
We are second in line/backup offer for a 100 year old farm house located in Wisconsin on 11 acres. The owner himself doesn't farm, but rends some of the land out to others that do-it is zoned partially as agriculture. It is all one tax parcel. It does have a barn, chicken coop, garage. No animals currently living on the property.The home has no known major issues-septic, boiler, well, roof all appear fine. It does have other major cosmetic issues (crappy gutters, heaving concrete, low ceilings in some of the home, terrible appliances, a bunch of random old house stuff like that). The current owner has said the sale is "as is", he will not be doing any repairs.WE are qualified for a conventional loan, have great credit, 20% down. The primary offer is currently pre approved with an FHA loan (not for the specific property, just in general). We are obviously hoping that their offer will fall through based on all of the FHA property condition requirements, but don't have enough experience to know-even though I have done a lot of research. Does anyone have any experience with this type of situation? What are the chances we might get this home, or should we plan to just move on? by johannaschultzjgs438 from Appleton, Wisconsin. Apr 10th 2018
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
Without knowing the specifics, it's near impossible to answer your question,but in general, FHA appraisal standards have actually reduced over the years, and conventional appraisal standards have got more strict to the point that there is little difference between the two.. If you talk to a "Seasoned" real estate agent,, they still remember when no one wanted to do FHA sales because most every property had condition issues that didn't fit FHA standards.. but as I stated, this has all changed.. So, that all being said,,,, regardless of the loan type, the property must meet minimum property standards and there cannot be any deficiencies that affect the health or safety of the occupants.. Broken windows, exposed wiring, evidence of mold, holes in the walls, roof leaks, etc, etc, etc.. regardless of the loan, these issues must be fixed in order for the loan to go through.. FHA does have an issue with pealing/chipping paint if the property was built prior to 1978 (lead based paint).. where, with Conventional, it might or might not be called out.. understand that even if conventional does not directly address a certain identified property deficiency, the underwriter (a real human being).. can still use "discretion" and ask that certain things be addressed/repaired prior to loan approval. The short of all this.. although there's no way to find out if the property will be approved for FHA,,, if it turns out it's not FHA approve-able. it also might not be approve-able for conventional. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893
Ask our community a question.
Get an answer
Related Questions
