December 6, 2016
“I am getting ready to purchase a home. It has been under contract for 6 weeks. 1.5 weeks out, ‘…there is concern that there may be moisture. Please have a specialist determine if there is no moisture or mold present’. My contractor that will do renovations says there is no mold present; however, ‘his word does not count because he is not a mold specialist’. Now I am 3 days from closing and a mold remediation person is $900 and a week turnaround time. What are my options?”
FHA appraisals are an important part of the home buying process, and where corrections are required by the FHA appraiser, those corrections are usually ordered as a condition of loan approval.
The reader question doesn’t specify if this was a correction or required action listed as part of the FHA appraisal or not, but it seems clear from the wording of the question that the loan may depend on the actions recommended. In that case, the course of action would seem clear-but it sounds as if the borrower and lender may have to work together on the timetable.
The reasons for the requirement aren’t clear. State or local law, building code, or lender standards may apply. FHA appraisals, appraisal guidelines, and loan rules aren’t the only ones which must be followed in cases like these, and FHA loan rules/regulations never overrule federal, state, or local laws.
The borrower is basically asking what his/her options are, but this is a question that is best addressed to the lender and possibly the seller, depending. A discussion of the closing date and related factors may be in order.
It’s not clear from the reader’s question whether this is an FHA loan situation or not, but in the case of FHA mortgage loans, the participating lender’s standards would also apply, so it’s entirely possible that the main issues could be worked out based on lender standards. If it’s a question of state law, building code or other requirements, the local authority would need to be consulted.
With respect to the reader question, the FHA doesn’t have much to do with these sorts of details (where the local authority or lender standards are concerned) unless there’s a situation that requires that agency to exercise its jurisdiction or there’s an issue with specific FHA requirements.
Borrowers should discuss these issues directly with the lender and the seller where appropriate, to see what course of action has been recommended in the past or what lender standards will allow. FHA requirements are part of the process, but don’t always have a say (or defer to the local authority) in certain aspects of the transaction.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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