Home Buying in 45245>Question Details

Phil, Home Buyer in 45245

Is there anyway FHA would approve a loan on a house with a foundation wall in the basement bowing in?

Asked by Phil, 45245 Wed Jul 1, 2009

Everything in this house is in good condition. It's bank owned so getting the seller to fix it is out of the question.
One of the basement walls is starting to move in. If I have a structural engineer perform an inspection would this help in anyway?

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Hi Phil,

From what I understand, if this is lender owned, you could ask the lender to fix the structural damage perhaps before you close, they may fix it. The FHA 203K rehab loan will not lend on structural, just cosmetics. Having the structural engineer come in will help if they give it a clearance. The appraiser is the one that would suggest for a structural engineer to inspect the wall. If the appraiser says nothing, then you can move forward to close without the structural engineer. You can not get money to fix the structural part with the rehab loan, but it would close if it appraises.

If you need a buyer agent, contact me today...would like to help you find your home. I work in the greater Cincinnati area.

Happy House Hunting,
Sheri Mapes the Cincy House Expert
(513) 253-7156
sheri.mapes@cbws.com
1 vote Thank Flag Link Wed Jul 1, 2009
Hi,

You are correct, the bank is not going to do anything.It's most likely sold "AS IS". To answer your question.Here in Virginia many Listing agents will not on the listing if the home cannot be sold to those who are using Government Financing. Generally, if an appraisers report notes a potential property deficiency or that the home is unsafe to you the buyer or the security of the property could be in jeapordy if the wall is not repaired then...chances are FHA financing would not be allowed.

So, it might be worth ordering an FHA Appraisal on the property . If the appraiser doesn't flag it, and you are fully aware of what you are getting into and can afford the fix, chances are the loan could go through. Just be sure that you know the costs involved before you buy. Ask you Realtor for guidance.

Ask you lender that question...they should be able to shed some light on the subject.
2 votes Thank Flag Link Wed Jul 1, 2009
prob not phil,unless you plan on the 203k and plan on longer timeframe to close

TJ
1 vote Thank Flag Link Wed Jul 1, 2009
Phil any appraiser doing either a conventional appraisal or goverment insured loan appraisal would have to mention the repair you are talking about in their appraisal report IF they notice the problem. If there was a problem with loan or the home they would have to bare some responsibility subjecting them to licensing & insurance issues. On an FHA loan the underwriter would most probably not approve the loan based on hte appraisal and FHA guidelines.
On a conventional loan the underwriter would probably ask for more guidance. Overall determination would be at the discretion of the bank. But keep in mine such a repair could possibly put the loan in jeopardy if it was beyond the ability of the borrower to make.
A structural engineer would be essential in this process but I don't know if it would influence the bank.
0 votes Thank Flag Link Fri Jan 14, 2011
Phil, not sure if you moved forward with this property, but I have recently worked with a lender who is a 'pro' when it comes to doing the FHA 203K and the FHA Streamline 203K. I asked him your question and he had some really good ideas to share. I do have a list of eligilble repair items under the 203K Streamline program. The trick is you really need a lender who is familiar with doing them. The back-end paperwork on these loans is extensive. (These loans do work with bank-owned properties) Email me and I can send you some info, or give you the lenders name to contact directly. Lani Gagnon lgagnon@sibcycline.com
0 votes Thank Flag Link Wed Sep 9, 2009
An engineer is not going to say the foundation is ok, so no, it will not help. There are two types of basement walls. The most common is in line with the foundation and outer wall of the house and is actually part of the foundation called the stem wall. If this is moving inward, the foundation is not only compromised, but actually unsound, and will most likely require replacement at that wall $$$$$$$$$$$$$$$$!

The other type of basement wall is actually inward of the foundation usually 2-3 feet away from the foundation and outer wall of the house. This is not directly part of the foundation. It is a retaining wall which keeps the dirt up under the foundation from falling inward onto the basement floor. Severe movement of this type of basement wall will cause settling and movement of the dirt under the foundation, and therefore, eventual damage to the foundation. Repair and/or replacement of the basement retaining walls is not as expensive as foundation repairs, but they do affect the foundation. If you have this type of construction, the inspection will show that the damage is not to the actual foundation which may help you with the loan.
0 votes Thank Flag Link Mon Aug 17, 2009
My first thought is to make sure you want to buy a house with a structural issues. It would be hard for me to believe that the house is in otherwise good condition, but it may be? Bank owned properties sell 'just as they are' - no repairs. I definately recommend a full house inspection, by a licensed 'ASHI" inspector. Generally, the bank will not make concessions - but after the inspection, you will be more knowledgable, and that is always a good thing. There are so many really good deals out there right now. Make sure this one is right for you. Lani Gagnon
0 votes Thank Flag Link Fri Aug 14, 2009
Phil

Hate to ruin your day but FHA will probably shoot down any loan on a home with a major structural problem. The lender will not fix it unless it is very high end and they can see a return to them. On a lower end priced home, they will probably sell the property as-is and it will usually be a cash deal so there is no appraisal. That means someone might get a home at a great price but will have to have the money to pay for any necessary repairs. This is one of the probelms we are seeing with the glut of foreclosed homes in the market. Some of them have serious problems and will not qualify for a loan. If you do buy a home with this type of structural problem be sure you have firm quotes, in wrtiting, by a reputable repair company.
0 votes Thank Flag Link Thu Jul 2, 2009
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