Homebuyers are looking for a deal – and sometimes you might think that purchasing a “fixer-upper” might be the best way to go!
The problem is that many sellers, including banks holding foreclosed property, might not want to accept an FHA borrower? Why? Because FHA will not take a property with a paint job like the one shown here. If you were purchasing this property, the exterior repairs would need to be done PRIOR to closing.
Most homebuyers do not want to sink money into a property they haven’t purchased yet – leaving the repairs for the seller (who often doesn’t have a ton of cash on hand, ergo this is why they are selling!).
FHA did make some moves earlier this year that lead some to believe that it’s EASIER to get financing with FHA on an existing home… and indeed, if you are purchasing a home in fairly good shape the appraisal process is easier! Look through this list with your realtor and we believe that you will agree that a Seller of a property in reasonable repair should accept a contract with FHA financing for the borrower.
Examples of MINOR property conditions that no longer require AUTOMATIC repair for existing properties are:
- Examples of Missing handrails;
- Cracked or damaged exit doors;
- Cracked window glass;
- Minor plumbing leaks (such as leaky faucets);
- Defective floor finish or covering (badly soiled carpeting);
- Rotten or worn out counter tops;
- Crawl Space with debris or trash;
- Defective paint surfaces in homes constructed Post 1978
Examples of tests that may no longer be REQUIRED:
- Wood Destroying Infestation Report-required if there is evidence of READILY OBSERVABLE ACTIVE infestation;
- Well (Individual Water Test)-Required if there is knowledge that well water may be near sources of contamination;
- Septic Test-required if evidence of system failure.
Don’t be confused when you hear stuff about FHA being a bad program! Get the FACTS! You MIGHT need an FHA 203K home improvement loan – ask us for details!
For more information on FHA MORTGAGES, contact Steve and Eleanor Thorne, The FHA EXPERT in NC 919-649-5058 at Connect With Us on Facebook,
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This was one of the more insightful posts I’ve read in a while. I continue to find comments very useful however. They’re almost like an accuracy validator. Once you read through them and slice out the junk you’re left with some very helpful additions to the original post. Ideally the post’s author would then post an “update” message to the post noting any corrections found in the comments.
I am trying to purchase my family home that has a leaky basement. I have estimates for repairs and am ready to schedule the work. Does this have to be done prior to obtaining an FHA loan. I am currently the owner by Heir but must get loan to pay debts and make repairs. Also there is a breaker that does not work would this need to be done prior to loan. (breaker in basement and is not currently being used for anything.)???
Kathy these are great questions. Each of these renovation projects take on a life of their own, don’t they? Because I will need to know things, like are you planning on living in the property to answer your questions – I’d ask that you call us at 919 649 5058. You will likely be connect to Elaine Carper on our Team, as she specializes in new construction and renovation loans!