I've been looking for a home most of the houses I've looked at that I like have some kind of addition out

Asked by Julio, 91352 Sun Jul 5, 2009

back (mother in law , uncle bob) type of additions. The person helping me tells me that there's no way I could get in to one of those houses. he said that once the appraiser describe the place and show measurments and photos etc,etc and there are no permits or they have permits at any rate FHA will not authorize the loan. Is this true or there is a way to work arround this. If the house has adittions is it considered a SFH still. I'm very frustrated with this situation can anyone shed some light in to this matter

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M.D.J, , Los Angeles, CA
Mon Jul 6, 2009
The additions need to be done in a workman like manner but no value is given and a cost to cure from the appraiser for it to be acceptable. The answer is a possible "Yes" with that in mind.


Good luck.
0 votes
CJ Brasiel, Agent, San Jose, CA
Sun Jul 5, 2009
I have worked with several clients that have bought (using FHA) homes that had non-permitted add ons and there was no issue with the appraisal or loan. With that said, it is the luck of the draw with appraisers. More the issue with non-permitted additions is the fact that they can create an insurance issue if anything were to happen due to sub-standard, non-permitted electric or such. Since the lender's collateral is the house, it is something not to to take lightly. Any lender's boiler plate "Thou shalt not...." will include non-permitted additions. Anything that places the collateral/house in jeopardy, places you in jeopardy.

I agree, if it can be converted back or demolished, that may be the best bet. However, I doubt a seller will do that just so you can get an FHA loan. Tough situation and frustrating to boot but keep looking. You will find a house without a non-permitted addition.

CJ
Web Reference:  http://www.TalkToCJ.com
0 votes
Rebecca Cham…, , Palos Verdes Estates, CA
Sun Jul 5, 2009
FHA loans will not cover non permitted additions unless they were done a very very long time ago and sometimes not even then. Sometimes the addition can be converted back (ie, room back to garage) and then it's not a problem. FHA loans are great for putting little down, but are very restrictive about what you can buy. The only other solution is saving 20% or more and then you will have a wider variety of property to choose from.

Good luck.
0 votes
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