We are in the process of buying a foreclosure. We have a FHA loan and are told we need to fix the electrical?
in the basement as well and put up shower walls around the bathtub before we even sign the paperwork to buy the house. Is this legal?
- acermillLv 71 decade agoBest Answer
Well, of course it's legal. FHA will not lend funds on houses with such defects. They require that these types of defects be repaired prior to closing. If this is a bank owned property, explain the situation to the bank. They MAY agree to handle the repairs, but will require that your offer to purchase be increased by the cost of the repairs, so that you can roll the costs into your mortgage. When purchasing a foreclosure, you generally buy 'as is', and sometimes these issues crop up.
- 1 decade ago
This is legal and completely normal. It can be tricky buying a foreclosure with a VA or FHA loan because of the appraisal. If the appraiser orders repairs, than the bank has to do them or you do not get financing. Many foreclosures are in such disrepair that it will never meet an appraisers standards.
Do not lose hope just yet. I have a friend who was using a VA loan to buy a house. The VA appraiser ordered that a bleach stain in the carpet be fixed, how do you fix that? The bank would not replace the carpet. So, instead of having the carpet replaced, they just appraised the house for less. It was still more than her loan so she was able to purchase the home. I am not sure how often this works but it might be something you can ask your lender about. This was a bleach stain, not electrical work so it probably is not an option for you but you never know.
- loanmasteroneLv 71 decade ago
Yes this is a request by the underwriter after looking at the appraisal.
These corrections must be made before the underwriter will sign off on the appraisal and eventually the final loan approval.
You might consult with your mortgage broker, about a FHA 203b loan.
With what you described as fix up this type of FHA loan might be able to cover this fix-up.
You will need to get an estimate from a licensed qualified electrician as well as a carpenter or whomever you might contact to repair the damage around the shower walls.
I hope this has been of some use to you, good luck.
- npkLv 71 decade ago
Yes, it is legal. For FHA loans, the house must be put into acceptable condition.
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- Anonymous1 decade ago
Well Duh yes it's legal. You want them to loan you money so you have to go by their rules. They aren't going to loan you money on a home unless it's in good condition and meets their standards! Maybe you need to educate yourself on all the ins and outs of buying a home, BEFORE YOU GO THERE! duh!