FHA (203K) - Unpermitted Addition in Denver

[Joshua Smith]

I am talking to the seller of a property in Denver. The house is in a great location and has a unpermitted addition in the back that can be rented out long term or airbnb (has a bathroom). 

My question is will the FHA appraiser/inspector look into the fact that it's permitted/unpermitted?

Also, the chimney is leaning, looks like it's about to collapse and the garage is sort of crumbling brick. Not sure how much that will cost in the 203K; But I guess I'll find out if I put it under contract. Any feedback on that is also appreciated.

[Jeff White]

@Josh Baker The FHA appraiser's job is to look for health/safety issues and recently sold comps, not verify everything that is permitted or unpermitted work, that is up to the prospective buyer to confirm and verify.

For a FHA 203k loan, that would be something to discuss with a lender that has done that loan product before.

Based on things like the chimney leaning and garage falling apart and probably a bunch of other things, that would be a great use of the 203k loan if you can convince the seller to accept it. The Denver market is extremely competitive, and I'm curious to see if you can convince the seller to accept a offer with a 203k loan.