Home Buying in 02904>Question Details

Michelle, Home Buyer in 02904

What constitute "unlivable" conditions to deny a mortgage for a condo?

Asked by Michelle, 02904 Sun Jul 17, 2011

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A laundry list of items, as well as your neighbor's laundry list too ... which could actually be an unlivable condition, if your neighbors laundry was piling up so big that it busted down your adjacent wall and into your condo unit, making it unlivable because you could not walk around... or if the kitchen was missing, or if there was no running water, or if there was no bedroom, or if there was mold everywhere - see how many unique situations could be described as unlivable?

My question to you is, why do you ask? Did an underwriter review an appraisal on a home you are buying and did not like, and gave the reason that it was unlivable? Or are you looking at a condo that you may think may be deeded unlivable by mortgage lenders? That'll help you get more specific answers.
1 vote Thank Flag Link Sun Jul 17, 2011
YES it would be nice and cheaper and no buying had the appraiser mentioned mold. Seems he missed that minor detail, and I got a big mess!!!! aND CANNOT MOVE INTO MY HEAALTH HAZARD!!! I KNOW EVERYONE IS SORRY!!! Sorry does not pay for repairs.
0 votes Thank Flag Link Wed Nov 26, 2014
Ask the mortgage broker more than likely distressed property not maintained

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Mon Jul 18, 2011
Shane, thank you for sharing all your knowledge, it helps.
0 votes Thank Flag Link Mon Jul 18, 2011
I gotcha. That is a valid concern if it is missing faucets and heaters.

The lender finds out about the condition of the home through an appraisal, they do not review your home inspection (99.9% of the time they don't review it). On the appraisal if there are items which are called "deferred maintenance" (meaning items that need fixing) they will be noted by the appraiser. Further, if you are obtaining FHA, VA or USDA financing, the appraiser will note anything that prevents it from meeting the property requirements that FHA, VA & USDA impose (called "minimum property requirements", or MPR's).

Once the underwriter at the lender reviews the appraisal, they will see those items, and anything that prevents a home from meeting the MPR's will need to be taken care of, "cured" as it's called, and any deferred maintenance will be subject to the lender's guidelines. Missing baseboard heaters & faucets would be an issue for both the MPR's & would be called out as deferred maintenance, so you could expect they will need to be taken care of.

You or the seller can take care of them, meaning after the appraisal is complete, but before you close on the home, they can all be installed/repaired/etc - at a cost to you or the seller. You would want to discuss the probability of the repairs being done as part of your offer.

Or you can qualify for a rehab/remodel loan, such as FHA's 203k Rehab loan, or Fannie Mae's HomeStyle Renovation loan. These loan programs are used to finance the purchase of the home + the cost of repairs + other improvements (meaning if the appliances could use upgrading, floor isn't so great looking, etc.). Since not everyone wants to buy a home that needs some TLC (Tender Loving Care) that is why in general they are less expensive, and you can also increase the value of your home by making the repairs & improvements, in some situations even over the cost of the repairs themselves. If you know that the home will need repairs going into things, you should plan on qualifying for a rehab/remodel loan and also have someone trained go through the home with you to identify which items will likely be called out to be repaired. You'll need a good real estate & loan officer in order to have as stress-free of a process as possible, as it is more involved than the typical purchase.

FHA's 203k rehab program: http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou…
Fannie Mae HomeStyle (there is a recorded presentation within the .pdf link that is helpful): https://www.efanniemae.com/sf/mortgageproducts/pdf/hsrenofacts.pdf

If you need a loan officer to help with those rehab programs then Andrew Adams is who I'd recommend, he went to University of Rhode Island and is up in Massachusetts: http://www.trulia.com/profile/203kspecialist/overview/
0 votes Thank Flag Link Sun Jul 17, 2011
I am asking because I am looking at a condo but I am afraid it may be deemed unlivable because alot of the finishing work need to be done on it, including the installation of the baseboard heaters and faucets.
0 votes Thank Flag Link Sun Jul 17, 2011
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