Tentative on buying properties with enclosed patio/porch or garage

[Ryan Fatula]

I come across many properties I am interested in that have an enclosed garage or patio/porch. I typically tend to stay away from these for my fix and flips, but I need to figure them out so I can tackle some of these deals.

Currently I am interested in a property that has a finished enclosed porch which is counted towards total GLA on county records. This enclosed porch is below grade but under central air. The listing agent says the property will not go FHA/VA which doesn't matter to me on the acquisition side, but most homes in this area go FHA and that will obviously matter on the sell side.

I'm not sure where I can find more info about FHA rules regarding enclosed patios/garages. I run into properties where the garage or patio enclosures are not reflected on county records, and then I run into some like the property I am interested in where the enclosure is counted as GLA on county records, but its below grade with air.

Should i just stay away from propeties like this altogether? I don't want to reduce the availability of deals because of these situations though.

Thanks in advance for any insight on this matter!

[Ryan Fatula]

One step ahead of you Ken! Just got off the phone with the county appraisers office, and they said that since it is ducted and under air, with a closet and a window, it should be counted as an additional bedroom when it currently is not.

They are going to send one of their appraisers out to check. He thinks it should have no reason to qualify for FHA financing (obviously he's not a mortgage broker but seemed a bright individual).

I'm currently in negotiations with the bank on this one, and my offer expires today. I'm trying to close a $10k gap with them and my main arguing point is that it needs a new roof(which it does) and this enclosure is not to code.

I think the agent was right in her assumption that this would not go FHA/VA because of the enclosure, but just didnt know enough to second guess the county records.

If a county appraiser goes out there and deems it a 3rd bedroom, I should be good to go as far as a retail buyer getting an FHA/VA loan.

I am however still searching out FHA/VA rules regarding how they lend on enclosures.