Drovall, Home Buyer in Chicago, IL

My realtor showed me a house not knowing it was Non-FHA approved. He knew perfectly well we were looking to

Asked by Drovall, Chicago, IL Sun Jul 19, 2009

buy through FHA, he knew verbally and on paper. We paid for inspection and appraisal, total of $700. After the appraisal my lender tells me they can't approve the loan because the house is not approved. it's not us, it's the property. Is it the realtor's fault for not doing his homework? can he pay us back? can we go to the co. to ask for our money?

Help the community by answering this question:

+ web reference
Web reference:


Borriska, , Phoenix, AZ
Tue May 15, 2012
I smell a bit of a Fish as I've seen this very situation played out twice in 2 months with a particular property. Although the "buyer" in at least one of these cases pulled out before inspection and the offer deposit was refunded (after the check being cashed of course-a new check issued thus after)
Everyone wants thier "friend" to be part of YOUR homebuying agents of necessity.
0 votes
Drovall, Home Buyer, Chicago, IL
Mon Jul 20, 2009
Thank you all for your awnsers!
Here's more info. The property was not FHA approved because the association, or community, in which this townhome is located, decided to not continue to be FHA.
They did used to be FHA loan approved, the whole community, but they decided to "unsubscribe" i guess you could say and now we couldn't even get the spot approval.
My loan office is incredibly helpful and he has been more than supportive with anything, so when he called me to tell me that the property won't be approved for FHA loan, he also asked me why were we shown a non-Fha home to begin with? if that's not what we had asked for?
The answer is probably because the realtor didn't find this out, until we did. it came to surprise to him to, when in reality, in my opinon, it shouldn't. the realtor should have known prior to showing it to us. My lender tells me we're all set for a mortgage, it's not us why we didnt' get it, it's the property.

That's all i got from my conversation with my loan office, i haven't talked to my realtor yet. but i'm pretty sure he'll have a hard time accepting the honest mistake that's costing me money.
0 votes
Bill Eckler, Agent, Venice, FL
Mon Jul 20, 2009
Sounds like there may be more to this one.
0 votes
Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Sun Jul 19, 2009
Jeff's answer is right on the money. I'm a loan officer and I have done hundreds or FHA loans and I just want to add a little to it.

There are a couple reasons why a home might not be FHA-approved. First and foremost is property condition. FHA has minimum property requirements which must be met - mostly health and safety related. It's the appraiser's job to identify these hazards and, if necessary, require that they be remedied. For this reason sometimes "fixer uppers" are not good candidates for FHA financing. Not your realtor's fault in my opinion.

Another reason it might not be FHA approved is if it is a condo. FHA has pretty strict requirements when it comes to lending on condos. However a quick search of HUD's website can tell you if a particular condo development is FHA approved. If this is the case your lender should have probably done their homework before ordering an appraisal.

Either way, I'm afraid your money is probably gone. The services were adequately provided and at the end of the day the reason for getting an inspection and appraisal is to keep both you and your lender from making a mistake costing you thousands of dollars. The $700 you spent is a risk of pursuing the property/loan and most likely a sunken cost.

Sorry probably not the answer you want to hear but it's a cost of doing business. I would probably dig a little deeper with your lender to find out why the home was not FHA approved though. It sounds like you maybe don't have a complete understanding of the why behind their decision.

best of luck
0 votes
Hannah Flieg…, Agent, Larkspur, CA
Sun Jul 19, 2009
Bummer. Your realtor may not have know that fha loans are based on your credit as well as the home qualifying for an fha loan. The fha loans are strict for example the toilet must be a certain amount of feet away from the sink, etc.

Good luck!
0 votes
Sarah, Both Buyer And Seller, Modesto, CA
Sun Jul 19, 2009
Why was the home not approved?
0 votes
Jeffrey Kropp, Agent, Chicago, IL
Sun Jul 19, 2009
While your realtor may have an idea regarding whether a home is FHA approved or not, that determination is made your lender and in particular your loan officer. Often times, they don't have all the info they need to make that determination until later in the process. My guess is he is not going to pay you back, that is the risk of pursuing FHA financing (or really any financing of any type). Tell us why the home was not approved- was it the condition?
Web Reference:  http://www.1sthomegroup.com
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more