FHA Loan - Appraiser and Roof issues

14 Replies

When selling a property to a buyer that is getting an FHA loan and the time comes around for the FHA appraiser to do his appraisal. Is he going to inspect the roof and actually climb up there?

If so, could he require a new roof and/or roof repair if he finds something wrong with it?

Could installing a new roof be a condition for the loan to be approved?


Hi qk, yes he/she can and yes they could. Usually, an appraiser will stay on the ground, especially in cold icy weather, just for safety reasons! The use binoculars too! They use to be pretty tough, it seems they go in cycles of being very hard and then slack up to just tough! LOL I have had properties fail due to pin holes in window screens, where it looked like some kid pushed a pencil in the screen just hard enough to round the square openings! From what I have heard in my local area lately they seem to be pretty lenient since everyone is trying to dump properties and FHA seems to let more slide by, just an opinion I heard from a realtor! I learned long ago to never lose sleep over an appraisal! Deal with it as it comes. Another thing, since we are still in snow in some places, they might escrow for the roof if it is needed, so you could fix it and then obatin your escrowed amount, being about one and a half the amount estimated for repairs. Good luck, Bill

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

Luis -

I've had the same experience as Bill. If the roof is in very bad shape and is impacted the interior of the structure (stains on the ceiling, mold, wood rot, etc), it can certainly be flagged and you can be required to repair/replace the roof before FHA will underwrite the loan.

That said, over the past year, I've noticed FHA getting a bit more lenient, but I had assumed it was just coincidence. Based on Bill's comments, it may actually be happening...

FHA appraisers can and do require you to fix a variety of things including roofs. On my last home I sold to a FHA buyer I made it through the first appraisal unscathed but the second one (just two days before closing) required some additional drain tile and catch basins around the basement walkout. I rarely work on my own projects but I was out there that night in the rain digging trenches.

Often times if the roof is worn but not totally deteriorated, an FHA appraiser may require that the roof be certified by a qualified roofing company.

The challenge with this is that the roofing won't provide the certification, usually for 2 years, unless they are certain the roof will last 2 more years.

Thanks all.

More details: the roof is not leaking, that was part of my repairs during the rehab. There were leaks around the ventilation pipe boots, so we replaced all the boots and the shingles around all the boots.So now the roof looks "patched up".

The remainder of the shingles are certainly worn but they are still doing their job. The roof is not leaking, and we have had plenty of rain to test that.

My concern is that if the appraiser calls the roof as a condition for loan approval, I go ahead an put in a new roof and then the sale doesn't go through for some other reason I am out of pocket for this roof and no sale!!

Is there a better way to structure this?

as far as a better way to structure it you can certainly just see what the fha appraiser says and then if they won't underwrite, then you will either have to comply or sell to non-fha only.

when I purchased my house, the appraiser mentioned that the roof will need replacing. The house was purchased as is. The seller disagreed that the roof was going bad becasue he had a roof inspector to look at the roof and he said that the roof was fine.Before Before purchasing the house, At settlement, I had the seller provide a 2 year warranty certificate on the roof from his inspector. My loan was through FHA, and the roof did not prevent me from from obtaining financing the home.

Correction ... I meant Inspector not Appraiser

RJ, interesting situation.

What does a warranty certificate do?

Would the previous owner or roofing company that provided the certificate be responsible for repairing it??

when the seller mentioned that he had a "roof ispector" had looked at the roof and did not see any issues. I told him to have his inspector to stand by his word and provide me with a warranty because he claimed to have went up on the roof to inspect. The warranty would require the roofing company to pay for repairs or replace the roof during the life of the warranty agreement.I did not have to get a warranty for FHA to finance the loan. I did it to protect myself from any expenses associated with the roofing issue.

Luis -

You can have the buyer get a bid on the work from a qualified contractor, and then stipulate in the contract that you (the seller) will be paying $xx.xx at closing towards a new roof.

The closing attorney will put the amount on the HUD as a seller expense and then cut a check to the contractor.

FHA shouldn't have any issue with this (the money isn't going to the buyer), and it will protect you from laying out cash before the property closes.

Your agent should be able to take care of the paperwork and coordinating with the closing attorney.

RJ, thanks for the explanation.

J, I agree with what you say and that is the approach that I would like to take but I consulted with an appraiser and a loan officer and they tell me that any mention of a roof repair/replacement on the contract will cause the FHA appraiser to require the replacement before approving the loan.

It seems the appraiser gets a hold of the contract before doing the appraisal.

Now, I would obviously have to wait for the actual appraisal to happen to see if this is true...

hey qk...make sure to follow up and keep us posted on this..i'm very intrigued as to how this will play out..i'm looking at selling a property in a few months and would like to see how FHA handles hiccups...thanks

Bryan A., Carolinas Revitalization, LLC | [email protected] | 704‑905‑6510 | http://www.facebook.com/carolinasrevitalization

I know this is late but better than never.

After a lot of back and forth, the buyer wanted a new roof and agreed to increase the purchase prices if I paid for the roof. So we increased the purchase price by $3,000 and it cost me $3,800 to put in a new roof, not bad.

My fear was going through the expense for a new roof and then the buyer backing out, so I made it a condition to put in the new roof once all the contingencies had expired. Which they did and the buyer went through with the purchase just fine.

The roofer also agreed to get paid at closing which helped me not coming out of pocket to pay them.

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