My House Needs Repairs I Can’t Afford. Can I Still Sell It?
Yes, you can still sell it. What usually decides whether that sale survives to closing isn’t your listing price. It’s the buyer’s loan.
What Can an FHA Appraiser Make You Fix Right Now?
Under the rules an FHA appraiser works from today, several things on a house get flagged as automatic repairs before the loan can close: defective exterior paint, the roof covering, the heating and cooling system, kitchen appliances, attic and crawl space conditions, and whether the utilities are on and running. None of that has to do with whether you and a buyer agreed on a price. It’s a separate checklist the appraiser runs, and it’s the appraisal, not the offer, that decides whether that buyer’s loan can close.
That’s where a lot of distressed sales actually die. Somebody two payments behind finds a buyer at a fair price. The appraiser writes up the roof. Now the only two people in the room have to work out who pays for a new roof: a buyer who just scraped together a down payment and closing costs, or a seller who’s behind on the mortgage. Usually neither one can. The buyer walks, and the house goes back on the market with weeks gone off a calendar the seller doesn’t control.
What Is FHA Proposing to Change?
On September 22, HUD posted a draft policy update on FHA’s own Drafting Table, “Modernizing and Strengthening Minimum Property Requirements.” It rewrites the section of the Single Family Housing Policy Handbook that sets this list. HUD’s own notice says the standards “have not been updated in over two decades and no longer reflect current industry practices.” Feedback on the draft closes November 6.
The draft would eliminate the automatic repair requirement for defective exterior paint and the roof covering, deferring instead to a general condition rating. Heating and cooling gets the same treatment. Utilities would no longer have to be turned on and operating before closing. Kitchen appliance standards go away entirely. Lead paint scope narrows to the dwelling itself instead of the whole property.
Does That Mean the House Doesn’t Have to Meet Any Standard?
No. What replaces the checklist is a single rating. The draft puts it plainly: houses get a condition rating from C1 to C6, and a minimum of C4 is required for FHA acceptability. A house rated C5 or C6 still doesn’t qualify. Dropping the roof and paint as automatic triggers moves the judgment onto that one number. It doesn’t loosen the standard for a wrecked house. It changes how a tired one gets evaluated.
An appraiser and a mortgagee still decide file by file. The draft’s own language is that where repairs are required, the mortgagee has to determine which ones actually get made.
Where Does That Leave You Right Now?
Nowhere different, yet. Nothing about this has taken effect. There’s no mortgagee letter and no effective date, and every FHA appraisal ordered this week runs under the rules in place today, not the draft. If you’re already under contract with a buyer using FHA financing, the roof, the paint and the HVAC system are still live items an appraiser can flag.
What Should You Find Out Before You Go Under Contract?
You could ask what loan type your buyer is using before the inspection period runs out, not after the appraisal comes back. FHA, VA, conventional and cash buyers all work under different property standards, and a repair that kills an FHA closing might not touch a conventional one. Might wanna find out what shape your roof and your HVAC system are in before you list, so a repair list doesn’t show up as a surprise the week you’re supposed to close.
Jacksonville is where I work these files, and questions about your own house are always welcome.
JimArmstrong904@gmail.com or (904) 671-4161, call or text.
Jim Armstrong, REALTOR®, Momentum Realty, SFR (Short Sales and Foreclosure Resource) certified. This is general information, not legal, tax, or financial advice.
Momentum Realty is not associated with the government, and our service is not approved by the government or your lender.
