FHA Loan on house needing roof replacement?

Question

Hello all,

I'm hoping to close on my first home by May. I spoke with the seller today and they were up front with me stating that the house will need a roof replacement. I grew up in an identical house that my parents still live in. I have recent estimates that a new roof is about $6,000 for this style of townhouse. Will it still be possible to obtain FHA financing?

How do these issues usually play out?

Anthony G · Answer

The 203k streamline covers smaller amounts, but I don't remember if there is a minimum.  I've done one before, and it can be a hassle but with only one repair item it should be straight-forward.

Sean F. · Answer

Thanks for all the replies. I will look into the 203k. However i'm afraid this type of loan is for bigger repairs. $6000 was a high estimate. I'm almost sure I can get the roof done for $4000.

Jeff Bridges · Answer

If you get qualified for a 203k Streamlined FHA loan, you should be able to wrap that repair into your loan, get that repaired before move-in (without needing a general contractor and lengthy repair documentation like normal 203k loans) and there shouldnt be much hassle in getting that repair included if you have it professionally inspected and confirmed. Just chat with your lender and mention that you'd like to pursue that route so you can provide it with your offer.

FHA inspection process will require something like minimum 2 years life left in the roof if you were just going the regular FHA route and preferred to pay for repairs out of pocket. They wouldnt lend without the 203k if there were obvious leaks or durability issues. See below for additional things they look for with the roof. Your lender will also be able to answer more specific questions if you tell them the exact roof condition. Its best to be forthcoming with them now rather than post appraisal and then get denied after paying for appraisal fees etc.

http://www.fha.com/fha_article.cfm?id=257

Ryan Lundquist · Answer

Sean, FHA requires a two-year roof certification as a part of their minimum property standards. If the roof look shoddy, the appraiser will require repair or a two-year roof certification so the property can meet minimum guidelines. Pat is right that a 203K could be a good option to roll the repaired roof into the initial loan.

Pat L. · Answer

Last one we did needing a roof was through a Bank not FHA.
The bank required money in escrow by the seller for the close.
Seller balked so we walked.
The place went into foreclosure but was trashed by the time it came back on the mkt.
Alternatively if you can qualify for a 203k loan you could wrap the whole thing together ??