You have the option to switch to FHA 203k rehab loan to have the repair cost be included in your mortgage. For more details about 203k loan, visit http://www.cfs203k.com.
CFS Mortgage - http://www.cfs203k.com
you switch the loan type to conventional with 5% down. I know FHA is 3.5% down but it my avoid some of repair requirements of a FHA repair. Then you can do them after you own the property. Talk to your mortgage provider to discuss the differences between FHA and Conventional. In the long run conventional in most cases the better choice.
How does your contract stipulate what will happen if FHA requires repairs. Usually the FHA addendum states that if the lender requires repairs to be made as a requirement of the loan then you submit that list to the seller. The seller than has x amount of days to respond to that notice whether they will or will not make the necessary repairs. If the seller does not agree to make the repairs than YOU CAN ELECT to make the repairs yourself before settlement, or if you decline, both parties can agree to void the contract.
It is very risky to make any repairs on the house when you do not own it! FOR STARTERS, what if while you are in there making repairs another problem is found, or your contractors create another error. Where does the liability lie?
I do not think I personally would go into someone else's house to make repairs, there are too many liabilities that could put you in jeopardy.
However, i do not know what the repairs are, so it could not be that big of deal!
Since this is a Fannie Mae owned home it should be eligible for a HomePath mortgage which doesn't require an appraisal and thus doesn't require the repairs to be completed prior to closing/funding.
In your contract where it states "as is" the owner is telling you that they are not typically willing to do any repairs at all so take that for what it's worth.
The safest bet could be switching from FHA to HomePath so you're not paying for a bunch of repairs without a hard commitment that you'll get the loan and the home.
I'm required to do a structural inspection (at 90$/hr ïŒ ) once to figure out where the very minor leak is coming into the basement and then a re-inspection report saying that it was fixed. Also will need a contractor to repair the external paint on 1/8th of the front of the house because it is pealing (rest is aluminum sided), plus will need a roof inspection saving that the roof has another 2 years of life to it at least. Then need to repay the lender's appraiser again to finish appraising the place (495$ first time then another 90$ to look at it again.). The lender doesnâ€™t care how the repairs are done, and says they must be done before they will finish the appraisal process, but the seller/Fannie Mae is requiring a licensed contractor to perform the work. My dad has been in construction for 30+ years and we were hoping to do the work ourselves after I actually own the place.
I would NEVER advise my client to pay for and do repairs on a house they don't own. In today's market, anything can happen to make a deal fall apart and then you've spent your money on someone else's property. Now, if your Realtor is so sure everything will be fine, have them pay for the repairs and you can pay them back once Title has transferred to your name. Or, better yet, ask the seller to pay for them - letting them know even though it's an 'as is', you can't get financing unless the repairs are complete before closing/funding and you're not going to pay for them. If neither of these ideas work, cancel contract and find a home better for your situation.