FHA Loan & Appraisal

FHA Loan & Appraisal

Real Estate Investor · Pittsburgh, PA · Member since 2008 · 53 posts · 4 votes

I have a FHA loan lined up to purchase a property but the property I am interested in has one issue with the foundation in the garage. The house is built into a hill and the garage is basically part of the basement. Where the ground has shifted during a heavy rainstorm some of the cinder blocks in the garage have cracked. The current owner said it has been like that for a year or so and the wall hasn't shifted any more. She also said that she had someone look at it who told her it wasn't an issue that needed to be fixed right away. I have heard that when getting an appraisal for an FHA loan the appraisers are pretty picky. One of the things I was told was be sure the paint looks good. Does anyone think this issue with the wall will prevent me from getting the FHA loan and therefore the property? I plan on getting the inspection but am more worried about the appraisal as I am not exactly sure how that works with an FHA loan.

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Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y

I'd be more worried about the unstable foundation than the bad appraisal. Have you had it evaluated by a foundation person? The seller has a very strong incentive to minimize the issue, and leave you holding the bag for a major problem.

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  • Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    18y

    I'd be more worried about the unstable foundation than the bad appraisal. Have you had it evaluated by a foundation person? The seller has a very strong incentive to minimize the issue, and leave you holding the bag for a major problem.

  • Real Estate Investor · Pittsburgh, PA · Member since 2008 · 53 posts · 4 votes
    18y

    Haven't yet had it evaluated. I still need to set that up as I am meeting with my attorney to go over the contract tomorrow. My worry is that if the inspection comes back and it's not a major issue, my FHA loan still won't be allowed on the property.

  • Investor · Phoenix, AZ · Member since 2008 · 4 posts · 1 vote
    18y

    FHA changed their guidelines a few years ago, but the appraiser's inspection process is the same. The appraiser is required to disclose any condition problems that are more than "cosmetic". If it is only "cosmetic", then that won't affect your loan. I would recommend that if the appraiser does not catch this potentially serious foundation problem, that you point it out and ask him to call for an inspection. That way you will know up front if there is a problem and the cost for the inspection can be included in your loan costs (many of which are probably being paid by the seller).

  • Real Estate Investor · Pittsburgh, PA · Member since 2008 · 53 posts · 4 votes
    18y

    Hey Paul thanks for the input. The bank won't allow me to be there for the appraisal but I am planning on getting my own series of inspections. And I do plan on attending those. I didn't realize the cost could be rolled into the loan amount though. That is interesting because I did get a 5% seller assist. The max allowed with my FHA loan is 6% so that is a decent chunk of cash.

  • Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
    18y

    I have read that there are FHA, VA, and Conventional loans. Are there any other types of loans? And what is the different between these types of loans.
    Thanks

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