Profile picture for taza
  • taza
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Fannie-Mae home needs roof and the lender is indicating 'as-is' sale. Anyone has any thoughts?

Hi, I am an investor, not a first time home buyer. I have been accepted on a homepath Fannie-Mae home that I offered over the sale price.
I got the inspection done and realized that the roof needs to be replaced. The lender wrote that the roof repairs is a requirement for funding. We sent that letter to the seller (Mind you, we did not get appraisal as this is Homepath home and not a requirement) and they rejected this as 'as-is' sale.
Its strange as Fannie-Mae, I hear, typically does conform to the funding requirements. Does anyone has any ideas/suggestions? Thanks!
  • October 21 2011 - Peoria
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Answers (6)

Profile picture for pmzsteve
There's a difference between Homepath and Homepath Renovation. Those are the two types of Homepath loans run through fannie mae. I wonder how your lender even got word of the repairs needed since they did not order an appraisal. Your only solutions here would be to do the repairs yourself or cancel and get your deposit back. Sometimes the banks try and squeeze as much blood from a turnip so what I do (and it has worked) is send them two documents. 1) a repair request and 2)cancellation and release of deposit. Then they'll know you mean business. Of course you risk losing the house, but if you're not willing to do the repairs, you're going to lose it anyways.
  • October 17 2012
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Profile picture for Carole Tyne
They require it to show on the appraisal as requirement.   The lender doesnt usually see the inspection report only the appraisal.   So if you had a appraisal they would allow the repair or reduction in price more than likely.   Could switch out of the homepath loan have the appraisal done.   Yet there could be other issues like not appraising.   Then you would need to go back with them on both issues.   Best Wishes!
  • October 17 2012
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"Providing an escrow for 150% of repair costs" means depositing enough your money to cover 150% of the repairs with the closing attorney. If roof repairs costs 10K, you deposit 15K to escrow account, do repairs, get 5K back from escrow account after Lender is convinced repairs are complete.
  • October 21 2011
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Profile picture for Susan Job
I'm curious as to how the lender even knew the roof was bad.  They do not require an appraisal or inspections on Homepath financing so the price or condition of the property is not a concern to the lender as Fannie Mae is insuring their loan on it without questions.  Typically on Homepath the lender has no idea of the condition of the property and doesn't care.  Did you provide your home inspection to your lender?  That can be a fatal mistake!  If that is the case, and you want to proceed with the purchase the home in the condition it is in, then you may want to move your loan to another lender that does Homepath financing and not provide them with information regarding the condition of the property.  These homes are sold "as is" and Homepath finances them "as is".
  • October 21 2011
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Profile picture for taza
  • taza
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Thanks John for your response. Could you please explain ' providing an escrow equal to 150% of the roof replacement cost' ?  I have a local lender who can accept but are you alluding that we can use this to get a homepath mortgage loan for that price? Thanks again!
  • October 21 2011
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We have had this problem repeatedly. Apparently Fannie Mae as a seller does not feel it needs to meet the same requirements when selling as funding. The only solution we have found here  is a local in- house lender who will close with the buyer providing an escrow equal to 150% of the roof replacement cost.
  • October 21 2011
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