203K Loan that closed and never should have. Need Help

[Danielle Ronin]

Hi All,

I'm new to this forum and I hope I'm in the right place. My apologies if I am not. My husband and I are in a serious situation with a 203K loan that closed/funded and is now at a complete standstill due to the town rejecting permits because of a FEMA regulation that was missed.

Long story short, we hired a contractor & architect for an upstairs addition (Bedroom over the kitchen and adding a bathroom) as well as kitchen renovation downstairs. We went through the entire 203k loan process where they scrutinized our finances, the financial legitimacy of the project and had a 203K consultant clear the entire project. We closed the loan, only to find out that the entire project violated a FEMA flood zone requirement that no one caught throughout the entire project. So now we are in a refinanced loan, expected to pay the new terms, the project cannot move forward without getting the town to clear the project. This would require us to either fillng in the crawl space or lifting the house a minimum of 6" which was out of scope of the project, never told to us until after we signed the loan. We would have never signed any paperwork if this was an issue.

Does anyone know what kind of lawyer we would need to help us with this ? This loan never should have closed and the bank is just sitting on the $170k for the construction that can't be done while we we are paying the new mortgage.

Thank you in advance.