What are the Fannie Mae / FHA guidelines?

Question

I am selling a home to someone that is getting a FHA/ Fannie Mae home loan. Here is the deal. When I bought the house I paid $25,000 for the house 5yrs ago. I know that the house & property value automaticlly go up. So we ageed on a price of $33,000 thats w/ some funiture, washer/dryer, & appliances. The house got appraised for $25,000, by the appraisal people, saying that the Gravity heaters in the floor were inadiquit. Then they said, on the appraisal that there was possible Lead Paint and/or Aspestos. Just the possiblity took the appraisal down to $23,000. My issue with this is... When I got the home 5yrs ago I was a first time buyer and these were not even mentioned on that appraisal then. I know there is No lead paint and I don 't think there is any aspestos either and the heaters work fine also. Why were these issues now? And how can get the appraisal amended to get more $ than what I paid for the house? Its an older 1 & 1/2 story house, 50+ yrs old.

Answer 1

FHA has more restrictive guidelines than most other lenders.

Just because the appraisal for the buyer came in short does not mean you have to lower your price. You and the buyer agreed on a purchase price. If the appraisal is short then the buyer has to come in with the difference.

For the purchase price of your home financing this home $33,000 @ 6% the payment would be $197/mo at 9% the payment is $265/mo. MAYBE THE BUYER NEEDS A NEW LOAN.

FHA has certain requirements about disclosure and habitability of a home that it take into account. Any home built before 1978 will have the possibility of lead paint. It’s what they used to make paint before then. If you have an acoustic ceiling (the cottage cheese stuff on the ceiling) you may have asbestos. This was used in homes built in the 60s for its fire resistance.

~Danke Schoen

Feel free to contact me with any other questions or a second opinion.

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Answer 2

Whoa! That's a lot of info.

First, you can not write a contract that includes furnishings. Banks will not give a loan that covers furnishings and it has to be separated out of the contract for the house.

Lead paint was banned in 1978. If your house was built before that, there's a possibility that there may be lead paint under some of the newer layers of paint. It's easy enough to test for though. A home inspector should be able to tell you how to do it.

Same with asbestos. A home inspector should be able to find it. If the home comes back lead and asbestos free, I would take the reports back to the appraiser and see if you can get him to change the appraisal. It seems odd to me that an appraiser would make these statements without actual proof that there is lead or asbestos there.

I hope you found this information helpful. Please visit my website at http://www.flwaterhomes.com if you have any other questions.

Jim Reske, Realtor
ERA Advantage Realty, Inc
Port Charlotte, FL

Answer 3

1/ You can get it re-appraised but the likelyhood of a different appraisal is slim...so why bother wasting the money....

2/ You can cure the issues in the appraisal for more $$.