FHA Appraisal/Inspection missing AC Condensers

4 Replies

I'm working my way through an FHA 203k streamline loan to buy a new primary residence. I think I've got it under contract very well. I fully anticipate it will appraise for about 90k over purchase price.

It is an REO property and while it has sat empty, someone has stolen all 3 condenser units from the side of the house. I've heard from my 203k renovation specialist (aka contractor) that it's not a big deal as long as we have a heat source (we do -- fireplace).

Is it true that we can leave a pile of broken a/c condenser parts in the yard and not fix them  as part of the 203k loan?  I really want to keep them out of the 203k loan because I don't think we're getting good pricing from the contractor. 

1 - 2.5 ton Goodman R410 14 SEER Heat Pump System

2 - 80% 80k BTU Natural Gas Furnace Coils (I assume the A/C condensers are included here too)

He wants over $15k ($9k parts $6k labor) to replace the three outside units and the furnace coils.  I can get full Goodman systems on the internet for about $2k each so I don't know where the other 3k for parts is.  I also know from a friend that this install should take 2 guys maybe 1.5-2 days.  Who in this world makes $1600/day besides surgeons and real estate investors?

First I would tell the bank the units were stolen while under contract and they may reduce the price or give you a credit. 

Second, why don't you look for another contractor? That seems really expensive. 

@Mark Ferguson thanks for your input.  The units were stolen before we went under contract.  I knew they were missing.  It's factored into my offer price.

I haven't looked for another contractor because my understanding is that with the 203k I can only have one general contractor for the job and all work has to funnel through him.  I asked about getting bids from other contractors and I was met with a wall of 11 new underwriting conditions.  I asked the lender if there were other contractors they worked with -- no.

So now my strategy is to do as little work as possible to get through the door and pass the FHA inspection. I'll fix all the non critical stuff either on my own or through my friends after the 203k charade is over.

It's also my understanding that I'm not allowed to do any of the work myself -- even if I'm not taking money out of the loan to do it.