Philadelphia RM-1 Appraised as Single Family for FHA

5 Replies | Philadelphia, Pennsylvania

I have a RM-1 zoned multi-family property that used to be a single family home. The property is basically a single family as the upstairs "unit" only has kitchen cabinets, no kitchen appliances. There are two meters and doors separating the units that I plan to remove. Without those it flows just as a single family would. 

Since it's listed as multi family, my lender is saying I will need to go FHA since I don't want to put 15% down, but that comes with upfront MIP and a large increase in monthly MIP compared to higher priced single families I've looked at.

Do you think that with only one kitchen and without the doors separating the two units, an appraiser would be able to value it as a single family so I can go conventional? 

Is there a full bathroom on both floors? Could the cabinets be Uninstalled before the appraisal? If it's listed on the multifamily MLS portal and RM1 zoning my gut feel is that an appraiser would want to treat it as a multifamily.

Originally posted by @John Knisely :

Is there a full bathroom on both floors? Could the cabinets be Uninstalled before the appraisal? If it's listed on the multifamily MLS portal and RM1 zoning my gut feel is that an appraiser would want to treat it as a multifamily.

There is a full bathroom on each floor. Yes, the cabinets could very easily, there are only a few. 

My gut it saying the same unfortunately.

 

@Lee Om

Was a use permit ever filed for multi family, or did someone just convert it?

Rm1 can be single or multi.

The 2nd kitchen will kill you. Get those cabinets down and remove the doors.

You should be able to get a use permit by right to change zoning to single family. You can apply online on the eclipse website eclipse.phila.gov. I just did this and I think it took about a week and I think cost about $50. You will get a copy of the zoning use permit that should satisfy the lender. If necessary, remove the extra kitchen cabinets but I don't think that will be an issue.