Can this fund? I have a buyer's agent saying that her LO is telling her it can. My LO's tell me different, but trying to see if there are any new guidelines I don't know about. Thanks for your help!

Susan

Current Property Requirements for FHA

Below are a few examples of repairs NOT required to be addressed by HUD
1. Appliances - NOT REQUIRED including refrigerators, dishwashers or stove. However, if stove is gas hook-up, gas hookup must be addressed and meet local code.
2. Missing handrails.
3. Cracked or damaged exit doors that are otherwise operable.
4. Cracked window glass
5. Defective paint surfaces in homes constructed post 1978.
6. Minor plumbing leaks (such as leaky faucets)
7. Defective floor finish or covering (worn through the finish, badly soiled carpeting)
8. Evidence of previous (non-active) wood destroying insect/organism damage where there is no evidence of unrepaired structural damage.
9. Rotten or worn out counter tops.
10. Damaged plaster, sheetrock or other wall and ceiling materials in homes constructed post 1978.
11. Poor workmanship
12. Trip hazards (cracked or partially heaving sidewalks, poorly installed carpeting).
13. Crawl space with debris and trash.
14. Lack of an all weather driveway surface.
15. Swimming pools NOT required to be filled.

Current Property Requirements for FHA

Below are a few examples of repairs which ARE required to be addressed by HUD.

1. Inadequate access/egress from bedrooms to exterior of home.
2. Leaking or worn out roofs (if 3 or more layers of shingles on leaking or worn out roof, all existing shingles must be removed before re-roofing.)
3. Evidence of structural problems (such as foundation damage caused by excewssive settlement)
4. Defective paint surfaces both interior/exterior for homes constructed prior to or in 1978.
5. Unfinished or unprotected wall coverings.

Inspection Requirements - FHA no longer mandates automatic inspections for the following items and/or conditions in existing properties.

1. Wood Destroying Insects/Organisms unless there is evidence of active infestation.
2. Well (individual water system) unless there is evidence of:
corrosion of pipes (plumbing)
areas of intensive agriculture within 1/4 mile
coal mining or gas drilling operations with 1/4 mile
dump, junkyard, landfill, factory, gas station, or dry
cleaning operation within 1/4 mile
unusually objectionable taste, smell or appearance of well
water.
3. Septic, unless there is evidence of system failure.
4. Flat and/or unobservable roofs.

Last week we had to put a stove in an REO for an appraisal with a conventional loan purchase.

Around here they are really getting strict and delaying closing for additional appraisals. This was a condition before so I'm surprised the LO and the BA are saying it is ok and sent me guidelines from the FHA book. I don't think they address this so, we shall see.

FHA establishes a minimum set of guidelines for insurability.

Lenders also establish guidelines that can be more strict than the minimum requirement of FHA. Like FHA still has no credit score requirement yet the lenders do.

If the stove is not present in the home then it should not be required. If it is present and mentioned as non functional in the appraisal and is included in the appraisers valuation then it could be required to be fixed or replaced.

Bottom line is lenders are getting retarded!

I have yet to come across a lender or mortgage company that will allow an FHA loan to close without a stove installed. They keep telling me that this is an FHA requirement, however I am starting to believe it is a requirement of the lender instead.

Let me state the 1 clear FHA guideline. If the stove is attached to the home and is part of the home ,built into the home or a counter,then it must be in working condition. Therefore if it is broken it needs fixed or replaced.

A stove that plugs into a wall and or gas line and that can be moved can be broken.

Anything more is a lender guideline.

I have had the identical experience of what Greg is stating.

Most stoves are slide-in's. If there is a slide in stove present, it must be working. If it's not present, it's not an issue per HUD.

However, if it's built in, like a grill-top gas, it must be working, gas turned on for the inspection.

It's the gas stoves that scare the hell out of me thinking about appraisers turning these on, many times with less than perfect maintenance records.

We are seeing a great number of lenders imposing their own guidelines over and above the HUD requirements. Everyone in REO (or in the business, period) should keep on hand HUD's Mortgagee Letter 2005-48, the infamous HUD memo that put the end to nitpicking on the appraisal and mandated only code and safety issues be enforced. You can find it here:
http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/05-48ml.pdf