Working with a HML who likes to know what he’s getting into and therefore will have every deal appraised, as he should. However, their underwriting guidelines aren’t as strict as say a FHA approved lender. Has anyone had a good or bad experience with appraisals that fall outside of FHA underwriting guidelines???
Thanks for your time!
Your question is unclear so I am going to guess on what you are trying to ask.
HML amost all of them have their own underwriting guidelines.
If your are doing HML you are not doing a FHA appraisal because the property needs extentsive repair.
Most loans outside of FHA loans fall out side of FHA underwritting.
There are conventional loans, subprime loans, VA loans,and finallly FHA loans.
All loan products and lenders again have their own underwriting guidelines and make their own rules also.
Appraisals are always reviewed no matter what product you use because of all the rampant fraud.
Yes, I have had values cut thus not able to do the loan because that effected my profit or other investors.
Yes, I have had appraisals denied because the appraiser was denied approval. so I have had to either go to an other lender or order an other appraisal
Yes, I have had appraisals rejected because they wanted work done on the house before they loaned against the collateral (mostly because the investors did not finish all the work)
All this not because they were FHA loans or FHA underwriting just general loans issues.
I’m a newbie and I appreciate the lenghty reply…
My biggest concern is borrowing money on a property using an HML that is appraised a little to aggresively. Even though the homes are in need of repair, they are using a “subject to” appraisal to arrive at a “fair market value”.
It would seem that in order to “make the numbers work”, the appraiser will skip over comps used on a typical FHA loan appraisal to get to more appealing comps that work for our purposes but still within the HML lending guidelines.
I wanted to see if there has been instances where the HML appraisal (done to there optomistic guidelines) didn’t hold up in the end, when its time to refi the property using FHA mortgage products. It would be tough to figure out come refi time that I’m 2 or 3 percent off and have to come out of pocket unexpectedly.
In the end, is it wise to use only FHA guidelines in your appraisal process so as to better insure more financing options on the exit end of an investment deal??? It would seem that if a buy fix sell strategy is being used, your target buyer will be wanting to use FHA products becasue they are the most economical choice for a home owner.
Thanks for your time…GO HEELS!
OH! Now I see what you are asking.
Yes, You are RIGHT you do not want to get a property that the appraisal is OVER VALUED or buying it with that value it may limit your exit strategies.
I always prefer a more CONSERVITIVE appraisal.
I am surprised that a HML is using an aggressive appraisal in my experience they prefer a more conservitive appraisal to protect their investment.
I do see cases where investors have had a over valued appraisal and when they do try to refi or sell the property to a third party the appraisal is cut value in the review process and/or the new appraisal comes in lower so the investor took the loss not the HML.