I'm in the process of purchasing my next foreclosure and the bank called to inform me that they have to stop working on my loan because the appraisal came back stating the property did not meet C4 conditions and mentioned the place was in habitable due to poor floor covering(stained rugs loose tiles), holes in walls, urine smells and broken window panes.
(Things you normally see with vandalized properties that sit vacant for a length of time .) is what I thought.
All of the items he listed seems to be cosmetic in nature nothing that can't be corrected.. Seeing that it was a foreclosure it was always expressed that you couldn't begin any work on the property until you have closed.
If I knew the appraisal was going to cause this big glitch I would have cleaned up the place before he performed his work.
I guess My bad for assuming those guys knew that the property is going to get repaired.
So my question is, "Can I dispute this appraisal and make a case to my bank to proceed."
Bank financing is dependent upon the property being safe and livable. Regardless of it's its things you can/plan to fix...it won't meet those general standards. Broken windows almost always disqualifies, peeling paint can, subfloor visible.
Foreclosure or not is regardless. Your intent to repair it doesn't really come into play either. It's the bank's lending guidelines.
You also can't clean up/fix it before hand- it's not your property yet.
@Lamont A. you need to find a lender willing to do a 203(K) loan or get another source of funding (private lender, HML, etc).
After further discussion today.. what you wrote Natalie is almost exactly what they told me.. I do know about the part that the property isn't mine yet and I can't start repairs.. this really sucks..
yes,, thanks Percy and Natile for taking time to share your knowledge..
Hi @Lamont A. ,
Fannie Mae will actually go for C5, which is worse than C4.
This deal isn't necessarily dead, depending on if there are any specific health/safety things identified, and what those are.
Time to dial for dollars, my friend. Your goal is to find a lender licensed to do business in your state that will lend on C4 or C5. Most LOs wont have it memorized if they will do it or not, because this isn't exactly what anyone wants as their "niche," and really you want it to actually be run through underwriting (the appraisal by itself), so it's reasonable to expect them to get back to you a day or two after you speak with them on the phone and email over the appraisal report PDF.
Yes I have begun my search for a private lending. I didn't want to go this route but time is winding down I need to close this thing.
@Chris Mason I've been trying to find more details on what will disqualify a home from financing.
Do you happen to have any resources you could share that list out the different requirements and what c4 vs c5 is ect?
Hi @Natalie Kolodij ,
Open up any residential appraisal conducted within the last decade or so. :)
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