Conventional Loan & deferred maintenance affecting closing

[Michael Win]

I have a home under contract. The Sale price is 15K under the Appraised value. My finances, income, credit history are all in order without issues for best rates. Typical 20% down.

The loan is in the final stages and received prelim approval last week and expecting final this week. Close is in 3 wks.

I get a call from my broker that the underwriter reviewed the Appraisal and the appraisal has "deferred maintenance" on the inside (carpet, tile), outside (Soffit). He gives me the impression that they would like this fixed before closing.   Home is rated C-4

This makes no sense to me
#1 - all of the rental properties I had these same issues and it was never brought up b/c it appraised at sale price
#2 - All older homes will have these deferred Maintenance. If the seller fixed all of these, he would sell it for a Higher price
#3 - Who cares about these deferred maintenance. The place is livable, and not a hazard. There were tenants in it for years without issues. Everyone has deferred maintenance in a house.
#4 - The house appraised over Sale price. Even if I did nothing to it, the appraisal states I could sell it over what I am buying it for.

Has anyone heard of this and how can any lender expect the buyer to fix all of the deferred maintenance before closing?  How do I go about satisfying the lender as getting another lender at this time would be difficult?

[Michael Win]

Bill,

There is no way for me as a buyer to fix a property that is not mine.  The seller is not going to fix these issues b/c he would be put at different levels of risks.  Plus fixing anything would be impossible before closing.

Anyhow,  The lender now wants me to get an estimate of costs to fix and put money in Escrow.  Makes no sense as the appraisal valued the home above sale price "AS IS"

If this is what mortgage companies can do, they can literally use the deferred maintenance clause on practically any home over 10 yrs old.

I have closed on Homes in worse shape and NEVER had someone require me fix deferred maintenance.  My 6 yr old million dollar home has deferred maintenance if you look into it.  

I don't know what is going on with underwriting, but it looks like they are trying to find reasons to not do loans.  As a borrower, I am able to jump through these hoops.  But most people are not able to do this.