Speaking of Home Mainenance....
August 12, 2009
One of the most used loans in today's real estate environment is the standard FHA insured loan. With a 3.5% down payment, a buyer can obtain financing up to a jumbo FHA of $500,000. Since the majority of our transactions in the Inland Empire fall in the FHA price range, we are seeing more FHA financing than in the past 5 years.
In the past, sellers did not relish a buyer using FHA financing because of the requirement of the seller to make repairs that would not have been necessary for conventional financing. My sense of it is this is no longer the stumbling block that it once was since every buyer will have a physical inspection and will request many of the repairs that are required by FHA. True, the seller can refuse to do these repairs for a conventional buyer, but will have to do them for an FHA buyer to obtain the loan.
Here is a list of the most frequent repairs required by FHA.
Broken windows must be replaced.
Large holes in the drywall will have to be repaired.
If a furnace, wall heater, etc is not in proper working order, it will have to be repaired or perhaps, replaced.
Gas leaks must be fixed.
The property must have a working hot water heater.
The property must have toilets, sinks, tubs or showers and the plumbing must be functional.
Exposed electrical wiring must be in conduits or behind dry wall.
Chipping and peeling paint must be scraped and a coat of paint applied.
Exterior doors must be present and functional.
If the property has security bars on the windows, these bars must have a quick release mechanism.
As mentioned in yesterday's post, the appraiser will look at the roof for signs of leaking and for signs of deterioration.
Any foundation or structural problems must be corrected. A common foundation problem that can be seen in our older (70 years or more) homes is the rock foundation. A house with a rock foundation is probably not a candidate for FHA financing.
One of the most used loans in today's real estate environment is the standard FHA insured loan. With a 3.5% down payment, a buyer can obtain financing up to a jumbo FHA of $500,000. Since the majority of our transactions in the Inland Empire fall in the FHA price range, we are seeing more FHA financing than in the past 5 years.
In the past, sellers did not relish a buyer using FHA financing because of the requirement of the seller to make repairs that would not have been necessary for conventional financing. My sense of it is this is no longer the stumbling block that it once was since every buyer will have a physical inspection and will request many of the repairs that are required by FHA. True, the seller can refuse to do these repairs for a conventional buyer, but will have to do them for an FHA buyer to obtain the loan.
Here is a list of the most frequent repairs required by FHA.
Broken windows must be replaced.
Large holes in the drywall will have to be repaired.
If a furnace, wall heater, etc is not in proper working order, it will have to be repaired or perhaps, replaced.
Gas leaks must be fixed.
The property must have a working hot water heater.
The property must have toilets, sinks, tubs or showers and the plumbing must be functional.
Exposed electrical wiring must be in conduits or behind dry wall.
Chipping and peeling paint must be scraped and a coat of paint applied.
Exterior doors must be present and functional.
If the property has security bars on the windows, these bars must have a quick release mechanism.
As mentioned in yesterday's post, the appraiser will look at the roof for signs of leaking and for signs of deterioration.
Any foundation or structural problems must be corrected. A common foundation problem that can be seen in our older (70 years or more) homes is the rock foundation. A house with a rock foundation is probably not a candidate for FHA financing.
posted by shirley harry at 4:06 PM
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