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  1. #1
    Barb Piatt's Avatar
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    Default FHA Appraiser Wants HUD Inspection

    Hello All -- We are seeking a refinance on our home, which is a doublewide manufactured home that has a detached "addition" consisting of a garage and large workshop. This "addition" is built very close to the mfg home, but is on its own separate foundation. The fascia and soffit of the mfg home were cut into in order to snug the "addition" up close to the exterior of the mfg home so that upon completion the two buildings will appear to be all one building. However, there were no structural modifications made to the mfg home and the "addition" totally supports its own load, roof and etc.

    The "addition" is complete on the exterior (siding, roof, windows and doors, etc.), and only requires interior finish to be done (insulation, drywall, things like that).

    Today the appraisal report came back, and the appraiser is requiring that we have an inspection done to determine if the "addition" has been built according to HUD Manufactured Home Construction Safety and Standards.

    We did not build the "addition". We bought the property a year and a half ago, the "addition" was built by the former owners who were unable to complete it. They did have a proper building permit for the construction, and inspections were done and passed at all proper stages up to the time when they lost funding and had to stop the construction. The permit expired a while later, but all the records are with the local Town offices (sent there by the County).

    We provided a copy of the permit information and inspections information. According to those, this "addition" was built according to the proper codes. Would that not automatically satisfy HUD requirements?

    So, do we need to get this HUD inspection? And if we should have it done, who do we call to get it done and about what will it cost? We are located in Yavapai County, Arizona.

    Time is of the essence as we need to one way or another satisfy the appraiser's concerns and get to closing on this matter.

    Deepest appreciation for any thoughts and advice.

    BarbP

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  2. #2
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Barb Piatt View Post
    Hello All -- We are seeking a refinance on our home, which is a doublewide manufactured home that has a detached "addition" consisting of a garage and large workshop. This "addition" is built very close to the mfg home, but is on its own separate foundation. The fascia and soffit of the mfg home were cut into in order to snug the "addition" up close to the exterior of the mfg home so that upon completion the two buildings will appear to be all one building. However, there were no structural modifications made to the mfg home and the "addition" totally supports its own load, roof and etc.

    The "addition" is complete on the exterior (siding, roof, windows and doors, etc.), and only requires interior finish to be done (insulation, drywall, things like that).

    Today the appraisal report came back, and the appraiser is requiring that we have an inspection done to determine if the "addition" has been built according to HUD Manufactured Home Construction Safety and Standards.

    We did not build the "addition". We bought the property a year and a half ago, the "addition" was built by the former owners who were unable to complete it. They did have a proper building permit for the construction, and inspections were done and passed at all proper stages up to the time when they lost funding and had to stop the construction. The permit expired a while later, but all the records are with the local Town offices (sent there by the County).

    We provided a copy of the permit information and inspections information. According to those, this "addition" was built according to the proper codes. Would that not automatically satisfy HUD requirements?

    So, do we need to get this HUD inspection? And if we should have it done, who do we call to get it done and about what will it cost? We are located in Yavapai County, Arizona.

    Time is of the essence as we need to one way or another satisfy the appraiser's concerns and get to closing on this matter.

    Deepest appreciation for any thoughts and advice.

    BarbP

    The permit expired for the addition ?
    Do you have a final inspection from the city or county on the addition.?

    I'm under the impession HUD inspections are done on the home at the factory. Additions would need to be completed to local building codes.

    You may be able to get an answer about HUD inspections from the AZ department of Mfg Housing.

    eCFR — Code of Federal Regulations

    Last edited by Dan Harris; 11-01-2012 at 11:21 PM.
    Phoenix AZ Resale Home, Mobile Home, New Home Warranty Inspections. ASHI Certified Inspector #206929 Arizona Certified Inspector # 38440
    www.inspectaz.com

  3. #3
    Barb Piatt's Avatar
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Dan Harris View Post
    The permit expired for the addition ?
    Do you have a final inspection from the city or county on the addition.?

    I'm under the impession HUD inspections are done on the home at the factory. Additions would need to be completed to local building codes.

    You may be able to get an answer about HUD inspections from the AZ department of Mfg Housing.

    eCFR — Code of Federal Regulations
    Yes, the permit expired for the addition in 2008 when the previous owner's husband died. The wife's financial circumstances changed drastically and she could not afford to finish the addition and had to let the permit lapse. All the structural things are done, it's under roof, has all windows and doors in place, all exterior siding is on. It is just the interior that needs to be completed. We intend to get a building permit -- probably next year -- and do the interior work to finish the thing up.

    No, we don't have a final inspection on the addition because it's not yet completed. However, it went through several inspections during the construction process up to the point that stopped, and it passed all those inspections.


  4. #4
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Barb Piatt View Post
    Yes, the permit expired for the addition in 2008 when the previous owner's husband died. The wife's financial circumstances changed drastically and she could not afford to finish the addition and had to let the permit lapse. All the structural things are done, it's under roof, has all windows and doors in place, all exterior siding is on. It is just the interior that needs to be completed. We intend to get a building permit -- probably next year -- and do the interior work to finish the thing up.

    No, we don't have a final inspection on the addition because it's not yet completed. However, it went through several inspections during the construction process up to the point that stopped, and it passed all those inspections.
    You will need to get an FHA fee paid inspector to inspect the property, garage. Most likely the appraiser is looking for an inspection on a HUD 92051 form. You can Google FHA Fee Paid Inspector and you will find the HUD website, you can then search your state for an inspector. I charge $350 for a 92051 finial inspection plus mileage, I have no idea what folks are charging in your area.

    In addition to this you might also need to have a final inspection by the city or county where the original permit was issued. Depending on their mood or rules you might be able to extend the permit if you explain everything to them.

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Scott Patterson View Post
    You will need to get an FHA fee paid inspector to inspect the property, garage. Most likely the appraiser is looking for an inspection on a HUD 92051 form. You can Google FHA Fee Paid Inspector and you will find the HUD website, you can then search your state for an inspector. I charge $350 for a 92051 finial inspection plus mileage, I have no idea what folks are charging in your area.

    .
    If your in the Prescott area Randy West may be able to help you, or recommend someone that can.

    Prescott Home Inspections | P.B.C. - Home Inspection Prescott, Arizona

    Phoenix AZ Resale Home, Mobile Home, New Home Warranty Inspections. ASHI Certified Inspector #206929 Arizona Certified Inspector # 38440
    www.inspectaz.com

  6. #6
    Barb Piatt's Avatar
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    Default Re: FHA Appraiser Wants HUD Inspection

    Thanks to you both for your suggestions and referrals -- we will definitely follow up and see what is needed.

    Have a great weekend!


  7. #7
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    Default Re: FHA Appraiser Wants HUD Inspection

    Update with more questions!

    As it turned out, the lender decided to send out an FHA Fee Inspector, we thought just to verify that the "addition" (stick-built structure adjacent to the manufactured home) was not attached to the manufactured home.

    However, although the FHA Fee Inspector did verify that fact, in her report she stated that everything about the "addition" would have to be completed in order to meet FHA minimum property requirements. She cited 3 HUD Handbooks as her sources and recommended an FHA 203k with estimated cost of completion $40K - $50K. Her report went on to list some of the items that would need to be completed, most of which were appropriate; however, she said we had a concrete tile roof and stucco on the exterior and neither of these is correct -- the roofs of both structures are standard shingle and the exteriors are standard siding.

    I have done a great deal of reading of the HUD Handbooks she referenced, and have also done a good deal of Internet research, and I do not find anywhere that FHA requires that a building that is separate from the actual home, must be completed in order to meet minimum property requirements. The previous owners intended to use the building as a game room/home theater. We intend to use it as an artist studio/workshop and for storage, and it presently functions as a garage (that part of the structure) and for storage and occasional indoor workspace. We don't believe that these uses would make the structure part of the property's GLA -- are we wrong about that?

    The Fee Inspector is also a consultant for FHA 203k loans. We had previously looked into the FHA 203k Streamline and got contractor estimates that put the cost to complete at below $30,000. A Streamline does not require a consultant. Her estimate would rule out the Streamline and a straight FHA 203k *would* require a consultant, so we feel that there is a conflict of interest at work here.

    This inspection was done on December 23rd and the report made available to us a few days later. We've been trying to get some clarification from this Inspector for the last two weeks, i.e., exactly what sections of each of the HUD Handbooks she referenced, did she rely on to conclude that an unfinished structure that is not part of the actual home doesn't meet FHA minimum property requirements, and also what did she mean by saying that our roofs were concrete tile and the exteriors stucco when that is not the case? So far, no answers.

    Last but perhaps not least ... the appraiser's conditions and her requirement for completion have totally sunk us on getting FHA financing via the lender we have been dealing with for the last 5 months (yes it has taken that long). The appraiser made his value conditional on completion of the "addition" and she backed that up. Per his appraisal, AFTER the structure is completed, THEN the property will be worth ... wait for it: $120,000. Why would we sink $40K to $50K more into it to complete the "addition" only bring it up to such a low appraised value? This is a property that appraised for $160,000 just 2 years ago.

    Any thoughts would be most appreciated!


  8. #8
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    Default Re: FHA Appraiser Wants HUD Inspection

    I don't have a specific reference for a HUD handbook, but I can tell you after being in this biz for 30 years, that unfinished work will not get an FHA loan. It sounds like you are out of luck for a FHA or VA loan until the work on the addition is completed. While a FHA appraiser won't check for permits, I strongly advise you to pull a new permit to complete the work.
    A conventional loan is probably possible for your home in this condition, but of course, the down payment and qualifying requirements are different and tougher than FHA for a prospective buyer.

    If you choose not to decide, you still have made a choice.

  9. #9
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Barb Piatt View Post
    Update with more questions!

    As it turned out, the lender decided to send out an FHA Fee Inspector, we thought just to verify that the "addition" (stick-built structure adjacent to the manufactured home) was not attached to the manufactured home.

    However, although the FHA Fee Inspector did verify that fact, in her report she stated that everything about the "addition" would have to be completed in order to meet FHA minimum property requirements. She cited 3 HUD Handbooks as her sources and recommended an FHA 203k with estimated cost of completion $40K - $50K. Her report went on to list some of the items that would need to be completed, most of which were appropriate; however, she said we had a concrete tile roof and stucco on the exterior and neither of these is correct -- the roofs of both structures are standard shingle and the exteriors are standard siding.

    I have done a great deal of reading of the HUD Handbooks she referenced, and have also done a good deal of Internet research, and I do not find anywhere that FHA requires that a building that is separate from the actual home, must be completed in order to meet minimum property requirements. The previous owners intended to use the building as a game room/home theater. We intend to use it as an artist studio/workshop and for storage, and it presently functions as a garage (that part of the structure) and for storage and occasional indoor workspace. We don't believe that these uses would make the structure part of the property's GLA -- are we wrong about that?

    The Fee Inspector is also a consultant for FHA 203k loans. We had previously looked into the FHA 203k Streamline and got contractor estimates that put the cost to complete at below $30,000. A Streamline does not require a consultant. Her estimate would rule out the Streamline and a straight FHA 203k *would* require a consultant, so we feel that there is a conflict of interest at work here.

    This inspection was done on December 23rd and the report made available to us a few days later. We've been trying to get some clarification from this Inspector for the last two weeks, i.e., exactly what sections of each of the HUD Handbooks she referenced, did she rely on to conclude that an unfinished structure that is not part of the actual home doesn't meet FHA minimum property requirements, and also what did she mean by saying that our roofs were concrete tile and the exteriors stucco when that is not the case? So far, no answers.

    Last but perhaps not least ... the appraiser's conditions and her requirement for completion have totally sunk us on getting FHA financing via the lender we have been dealing with for the last 5 months (yes it has taken that long). The appraiser made his value conditional on completion of the "addition" and she backed that up. Per his appraisal, AFTER the structure is completed, THEN the property will be worth ... wait for it: $120,000. Why would we sink $40K to $50K more into it to complete the "addition" only bring it up to such a low appraised value? This is a property that appraised for $160,000 just 2 years ago.

    Any thoughts would be most appreciated!
    You can hire or fire any 203k Consultant. Hire your own 203k Consultant and let them help your though the process. If you have a good consultant they make the process work and it is easier on you, the owner. Streamline 203k's are difficult, pay for the consultant and let them help you.

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  10. #10
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    Default Re: FHA Appraiser Wants HUD Inspection

    Thanks for the replies ... but I'm still confused (not necessarily anything new!). I have seen a lot of garages and workshops that were just framed up and closed in, may or may not have electrical wiring done, but were not finished off on the inside with insulation, drywall and so forth. With garages in particular, this is done. And one can buy shed kits of many sizes all day long that go up without interior finish work. I'm sure that properties with these features also get FHA or VA financing every day.

    What makes our situation different? The structure is safe, secure and stable "as is". Doesn't that answer FHA's requirement?


  11. #11
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    Default Re: FHA Appraiser Wants HUD Inspection

    I've contacted our state HUD office with my question about whether combo garage/workshops need to be complete with insulation and drywall in order to be FHA compliant. When I hear back, I'll post the response.


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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Barb Piatt View Post
    Today the appraisal report came back, and the appraiser is requiring that we have an inspection done to determine if the "addition" has been built according to HUD Manufactured Home Construction Safety and Standards.
    The appraiser is showing why they appraise property and do not inspect property, and that they are not a knowledgeable appraiser either - that addition is "construction" and needs to be done with permits and meet "construction" building codes ... that addition is not "manufactured" and therefore has nothing to do with HUD "Manufactured" home codes or standards.

    The appraise should have asked to see permits and inspections from the local building department, presuming that you are in an area which, in fact, has adopted a code and enforces the code.

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
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    Default Re: FHA Appraiser Wants HUD Inspection

    Hang in there, Barb. When you're dealing with a Federal agency, extra doses of patience are a requirement. Often their inspectors are some of the most poorly-trained and/or least experienced individuals out there.

    Case-in-point--I'll always remember the FHWA (Federal Highway Administration) regional bridge engineer, some years ago, who spent a day accompanying me while I inspected a few of "his" Interstate 25 bridges in NM. We were up close and personal with a few welded transverse stiffeners on a plate girder structure, and he pointed to some lumps on a vertical fillet weld and proudly stated "I would never have left this girder out of the shop if I had been doing the fab shop inspection." I then took a swing at the weld with my trusty chipping hammer, and we both watched several gobs of weld slag fall off the weld, revealing a very pristine fillet weld underneath, pretty and uniform enough to be a bracelet. I interrupted his stammering by telling him that stick welded, vertical-position weld slag is often lumpy. I strongly suspect he had never heard of, or seen, weld slag.

    He was uncharacteristically quiet the remainder of the day.


  14. #14
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by BridgeMan View Post
    Hang in there, Barb. When you're dealing with a Federal agency, extra doses of patience are a requirement. Often their inspectors are some of the most poorly-trained and/or least experienced individuals out there.

    Case-in-point--I'll always remember the FHWA (Federal Highway Administration) regional bridge engineer, some years ago, who spent a day accompanying me while I inspected a few of "his" Interstate 25 bridges in NM. We were up close and personal with a few welded transverse stiffeners on a plate girder structure, and he pointed to some lumps on a vertical fillet weld and proudly stated "I would never have left this girder out of the shop if I had been doing the fab shop inspection." I then took a swing at the weld with my trusty chipping hammer, and we both watched several gobs of weld slag fall off the weld, revealing a very pristine fillet weld underneath, pretty and uniform enough to be a bracelet. I interrupted his stammering by telling him that stick welded, vertical-position weld slag is often lumpy. I strongly suspect he had never heard of, or seen, weld slag.

    He was uncharacteristically quiet the remainder of the day.
    Thanks -- I think I needed that!

    The thing is, of course I'm not an inspector or appraiser of any sort, just a hopeful homeowner. But I worked in law for almost 20 years, and after two years of seeking a regular-type mortgage, some things are starting to "look funny" to me.

    For example, this most recent appraisal (FHA) was our 4th in two years. Of the previous three, two were VA appraisals and one was an FHA. So now we've had 2 VA and 2 FHA -- and none of the previous three appraisals said that this structure didn't meet FHA minimum property requirements. On one of the VA appraisals, the lender said that the VA would not do the loan with the structure unfinished -- we contacted the VA directly and were told that the VA does not care whether or not an additional structure is finished, but that the lender may care and make that call. So we do realize that lenders can have or put their overlays. But to date, 3 out of 4 appraisers didn't make any requirement that the unfinished structure be completed before it could qualify for financing.

    So at this point, I'm at that "show me the law" stage, I want to see the wording *in context*. I don't want someone to tell me something and when I double check it, I find out the FHA is referring to condominiums in that paragraph or section. Getting financing on a manufactured home property is hard enough, getting a decent appraisal is hard enough in this economy, we don't need wool being thrown around -- and paying people to do it -- on top of those already difficult circumstances.


  15. #15
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Barb Piatt View Post
    Thanks -- I think I needed that!

    The thing is, of course I'm not an inspector or appraiser of any sort, just a hopeful homeowner. But I worked in law for almost 20 years, and after two years of seeking a regular-type mortgage, some things are starting to "look funny" to me.

    For example, this most recent appraisal (FHA) was our 4th in two years. Of the previous three, two were VA appraisals and one was an FHA. So now we've had 2 VA and 2 FHA -- and none of the previous three appraisals said that this structure didn't meet FHA minimum property requirements. On one of the VA appraisals, the lender said that the VA would not do the loan with the structure unfinished -- we contacted the VA directly and were told that the VA does not care whether or not an additional structure is finished, but that the lender may care and make that call. So we do realize that lenders can have or put their overlays. But to date, 3 out of 4 appraisers didn't make any requirement that the unfinished structure be completed before it could qualify for financing.

    So at this point, I'm at that "show me the law" stage, I want to see the wording *in context*. I don't want someone to tell me something and when I double check it, I find out the FHA is referring to condominiums in that paragraph or section. Getting financing on a manufactured home property is hard enough, getting a decent appraisal is hard enough in this economy, we don't need wool being thrown around -- and paying people to do it -- on top of those already difficult circumstances.
    Barb,

    With all the changes continually happening at the Fed Govt level and trickling down to FHA, Freddie-Mac, Fannie-Mac, VA and on and on many of the lenders do not even have a clue as to what will be acceptable or not day after tomorrow.

    It is a paperwork nightmare and shuffle and as noted above many times the lenders are requiring extra things just to CYA in advance as they honestly likely don't know what will work or not.

    I'm an FHA Fee inspector as well as a 203-K Consultant along with a Texas TREC licensed inspector. I stopped doing the 203-K's about 4 years ago due to the bureaucracy and some lenders that wanted shortcuts and another lender that refused to pay the fees required. They also had far more requirements than what were required by the 203-K program. I found out later they were just dumping more paperwork as a CYA and a confusion to the process.

    It is a rare combination to get (for example) a 203-K Consultant and a lender on the same songsheet. I found I was spending hours upon hours trying to explain the process to the lenders and the agents involved. It ended up as not being worth all the hours and very little I was getting paid ... as noted I stopped doing 203-Ks.

    I'll repeat what has been stated ... Stay strong and demand chapter/verse facts and be sure you have a bottle of the "patient pills" handy.


  16. #16
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    Default Re: FHA Appraiser Wants HUD Inspection

    Hi, Barb,
    I'm an FHA DE underwriter...
    HUD requires a foundation cert on all manufactured homes. The inspection must be done by a qualified foundation inspector and stamped with a seal. The addition must not affect the integrity of the structure.
    What I'm a little confused about is that you stated it's a garage/workshop. Why would the appraiser call for completion of the interior? As far as I know, a garage/workshop doesn't require insulation and drywall. By your description, this wouldn't be considered living area.


  17. #17
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    Default Re: FHA Appraiser Wants HUD Inspection

    From what you have shared, you have a stick-built structure abutting the manufactured home which has not been completed and never granted occupancy and there has been a subsequent conveyance to you as-is.

    There is no set-back or spacing, or little, between the manufactured home and the stick-built accessory structure. Both structures have different foundation systems. The sole "interconnection" planned is weather stripping. The siding and other portions of the manufactured home were "cut" and/or "removed". The project has not been completed.

    The encroaching (to spacing between structures) walls of the accessory structure "garage" have not been completed regarding the required separations and prescribed fire resistant construction required for set-back proximity and proximity to adjacent structures.

    The accessory stick-built "garge" is not occupiable at present. There has yet been no permit application or communiction with the local building authority since the conveyance (property transfer).

    It remains unclear if the entirety of the purchase transaction was for real property alone or if the manufactured home itself was conveyed as chattle.

    I suggest your first best resource is the Building Official's office with authority of your jurisdiction, since the site-built, larger thn 120 sq. ft. "garage" would most likely fall under the One- and Two-family Residential Code. IIRC AZ has subsequently (to the long-since-abandonded construction project) adopted newer standards (IIRC '09 code cycles with ammendments). Fully expect the original plan long-previously submitted for long-expired, incompleted, never finaled construction project by previous owner, to be no-longer compliant in some significant areas if what was partially completed was to absolute minimums and certain requirements which have been subsequently modified under present requirements are more stringent.

    Separation/fire resistant construction for set-back/proximity of IRC vs. HUD construction required for occupancy. Construction lending generally requires approved plans & permits conditionally. Incomplete suspended and unpermitted construction projects are generally viewed as a liability/hazard and detract from asset valution appraisals.

    There are also many information documents & links at your state's (AZ.gov - not local office as a part of Fed. gov) office of manufactured housing (don't recall official designation in AZ at the moment, might be OMHI or MHI or something similar.).

    The free-standing accessory structure of close proximity vs. what is and is not an acceptable financable "addition" and when and what IS an "addition" to a mnufactured home, just may be where some of the "glitches" in information are.

    It seems from your descriptions - that the structure is NOT an addition but a close-proximity accessory structure, sight built, subject to IRC in addition to restrictions regrding the HUD manufactured home (fed register).

    Zoning, subdivisiion, park, etc. further rules restrictions may further apply, changes in wind zones, flood areas, etc. as well since the former now abaondoned "project" first began.

    Perhaps if you abandonded for the time being the discussion of this structure some-day being "a shop" and stopped calling same "an addition" and instead as being "attached" (see link below) and approached it as getting a non-conforming, incompleted, not-yet completed, now expired permit of another's project, re-planned, inspected, re-approved, and permitted, and completed to minimum current standards (including the REQUIRED and completed fire-resistant construction - i.e. the finishing details regarding parallel walls, etc.) to a certificate of occupancy for the "attached" yet structurally independant, simple, minimum accessory structure "garage", get your HUD appraisal and secure your HUD financing. THEN proceed with your future "improvements" construction project financing plans?

    Yes, the economic downturn has effected values of just about everything. Consider yourself fortunate to have ONLY seen a 25% reduction in appraised value in two years - especially considering the un-occupiable unfinished accessory structure status.

    Do you even own this yet? Park, MH subdivision, all-by-itself elsewhere (the "lot").

    P.S. you *might* glean some information and/or 'leads' here...

    http://www.dfbls.az.gov/omh.aspx


    Last edited by H.G. Watson, Sr.; 01-27-2013 at 12:04 PM.

  18. #18
    Barb Piatt's Avatar
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by Carol Lamon View Post
    Hi, Barb,
    I'm an FHA DE underwriter...
    HUD requires a foundation cert on all manufactured homes. The inspection must be done by a qualified foundation inspector and stamped with a seal. The addition must not affect the integrity of the structure.
    What I'm a little confused about is that you stated it's a garage/workshop. Why would the appraiser call for completion of the interior? As far as I know, a garage/workshop doesn't require insulation and drywall. By your description, this wouldn't be considered living area.
    This is exactly my question! We do have a foundation cert on the manufactured home done by a qualified inspector and with a seal -- he also certified the separate foundation of the garage/workshop.

    The original owners intended the site-built structure to be a garage/game room/home theater -- I don't know if their planned use would be considered living area, but our planned use in any case is different.


  19. #19
    Barb Piatt's Avatar
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by H.G. Watson, Sr. View Post
    From what you have shared, you have a stick-built structure abutting the manufactured home which has not been completed and never granted occupancy and there has been a subsequent conveyance to you as-is.

    There is no set-back or spacing, or little, between the manufactured home and the stick-built accessory structure. Both structures have different foundation systems. The sole "interconnection" planned is weather stripping. The siding and other portions of the manufactured home were "cut" and/or "removed". The project has not been completed.
    Yes, correct that there is little spacing between the manufactured home and the stick-built accessory structure and that they have different foundations. However, no siding of the manufactured home has been cut or removed or is planned to be cut or removed; only the soffit area at that end of the manufactured home has been cut back.

    Quote Originally Posted by H.G. Watson, Sr. View Post
    The encroaching (to spacing between structures) walls of the accessory structure "garage" have not been completed regarding the required separations and prescribed fire resistant construction required for set-back proximity and proximity to adjacent structures.

    The accessory stick-built "garge" is not occupiable at present. There has yet been no permit application or communiction with the local building authority since the conveyance (property transfer).

    It remains unclear if the entirety of the purchase transaction was for real property alone or if the manufactured home itself was conveyed as chattle.
    Well, we have talked several times with the local building authority because we needed the basic information about the original permit, inspections "to date" and whatnot, and also to find out what we will need to do in order to re-permit and complete the construction, but there has been nothing formally done as of yet.

    The manufactured home was affixed in 1994 and is on 2 acres of property, it has been real property since then.

    Quote Originally Posted by H.G. Watson, Sr. View Post
    I suggest your first best resource is the Building Official's office with authority of your jurisdiction, since the site-built, larger thn 120 sq. ft. "garage" would most likely fall under the One- and Two-family Residential Code. IIRC AZ has subsequently (to the long-since-abandonded construction project) adopted newer standards (IIRC '09 code cycles with ammendments). Fully expect the original plan long-previously submitted for long-expired, incompleted, never finaled construction project by previous owner, to be no-longer compliant in some significant areas if what was partially completed was to absolute minimums and certain requirements which have been subsequently modified under present requirements are more stringent.

    Separation/fire resistant construction for set-back/proximity of IRC vs. HUD construction required for occupancy. Construction lending generally requires approved plans & permits conditionally. Incomplete suspended and unpermitted construction projects are generally viewed as a liability/hazard and detract from asset valution appraisals.

    There are also many information documents & links at your state's (AZ.gov - not local office as a part of Fed. gov) office of manufactured housing (don't recall official designation in AZ at the moment, might be OMHI or MHI or something similar.).

    The free-standing accessory structure of close proximity vs. what is and is not an acceptable financable "addition" and when and what IS an "addition" to a mnufactured home, just may be where some of the "glitches" in information are.

    It seems from your descriptions - that the structure is NOT an addition but a close-proximity accessory structure, sight built, subject to IRC in addition to restrictions regrding the HUD manufactured home (fed register).

    Zoning, subdivisiion, park, etc. further rules restrictions may further apply, changes in wind zones, flood areas, etc. as well since the former now abaondoned "project" first began.

    Perhaps if you abandonded for the time being the discussion of this structure some-day being "a shop" and stopped calling same "an addition" and instead as being "attached" (see link below) and approached it as getting a non-conforming, incompleted, not-yet completed, now expired permit of another's project, re-planned, inspected, re-approved, and permitted, and completed to minimum current standards (including the REQUIRED and completed fire-resistant construction - i.e. the finishing details regarding parallel walls, etc.) to a certificate of occupancy for the "attached" yet structurally independant, simple, minimum accessory structure "garage", get your HUD appraisal and secure your HUD financing. THEN proceed with your future "improvements" construction project financing plans?

    Yes, the economic downturn has effected values of just about everything. Consider yourself fortunate to have ONLY seen a 25% reduction in appraised value in two years - especially considering the un-occupiable unfinished accessory structure status.

    Do you even own this yet? Park, MH subdivision, all-by-itself elsewhere (the "lot").

    P.S. you *might* glean some information and/or 'leads' here...

    http://www.dfbls.az.gov/omh.aspx
    We had the local building authority review the original plans, and fortunately little if any changes to the plans will be required in order to complete the structure -- they have requested that we have the plans redrawn to make them more legible, which we will do.

    We do own the property; however, because the property was going into foreclosure when we bought it and the first lender we applied to ultimately decided not to finance because the appraiser referred to it as "unique", we went with a private lender for the initial purchase. He has been charging 12% interest, going to 14.5% in February (all of it going to interest, none to principal) and our monthly payment is therefore too high to allow us to finance completing the stick-built structure out of pocket until we can get a "normal" mortgage.

    EDITING TO ADD: Also, in fact I've talked with a contact at this AZ government agency --
    http://www.dfbls.az.gov/omh.aspx -- the AZ Office of Manufactured Housing. Sent her photographs and information, answered her questions, and her conclusion was that this "addition" was very well built, she liked the way it had been designed to sit up close-to-but-not-attached-to the manufactured home, she could clearly see that the structure was not impacting on the manufactured home. She further said that additions of many types are common with manufactured homes, and her office does not inspect those additions -- the additions are stick built and must meet local building codes and be inspected by local code inspectors, there is no need for involvement of her office.

    Last edited by Barb Piatt; 01-29-2013 at 12:15 PM. Reason: Additional Information

  20. #20
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    Default Re: FHA Appraiser Wants HUD Inspection

    Earlier in this thread (about 10 days ago), I posted that I had contacted our state HUD office to find out whether combo garage/workshops need to be completed in order to be FHA compliant – and that I’d post the response when I received it.

    The state HUD office referred my question on to the FHA Resource Center, and here is the reply from them:

    >>>Thank you for contacting the FHA Resource Center. Based on the content of your email, the information below should answer your request.

    However, if the information does not fully address your question please contact your lender for further assistance.
    Your email request was regarding if a property has to be complete in order to be eligible for FHA financing.
    FAQ: What are the general acceptability criteria for properties to be insured with FHA loans?
    To be eligible for FHA financing, a property must be in a condition and location that are free of all known hazards and adverse conditions that affect the health and safety of occupants, the structural soundness of the improvements, or impair the use and enjoyment of the property.
     
    Since the FHA Resource Center specifically referred to Chapter 2 of Hud Handbook 4905.1, I looked at that. It’s a 5-page document, but below are what appear to be the sections of that Chapter that are deemed relevant by the FHA Resource Center, and my comments on those sections:  
    2-2 REAL ESTATE ENTITY. The property must comprise a single readily marketable real estate entity.


    ----- My comment: Our property meets this requirement.

    2-3 PARTY OR LOT LINE WALL. A building constructed on or to a property line must be separated from the adjoining building, by a wall extending the full height of the building from the foundation to the ridge of the roof. The wall can separate row type townhouses or semi-detached units,


    There must be Adequate space between buildings to permit
    maintenance of the exterior walls.


    ----- My comment: Neither the manufactured home on our property nor the combo garage/workshop are constructed on or to a property line, so this requirement is not applicable to our property.

    The next couple of sections in Chapter 2 reference requirements of the living unit such as adequate and potable water, adequate heating, sewage facilities and electricity.
    ----- My comment: Our property meets all these requirements.

    2-6 NONRESIDENTIAL USE.


    A. Design Limitations.

    1) Any nonresidential use of the property shall be subordinate to its residential use and character. A property, any portion of which is designed or used for nonresidential purposes, is eligible only if the type or extent of the nonresidential use does not impair the residential character of the property.
    2) Areas designed or used for nonresidential purposes shall not exceed 25 percent of the total floor area. Storage areas or similar spaces which are integral parts of the nonresidential portion shall be
    included in the total nonresidential area.


    ----- My comment: I believe our property meets this requirement; however, that may turn on what is meant by "nonresidential use". The manufactured home is the living area, the combo garage/workshop is not living area, they are both part of the "residence". Since many properties, both stick-built homes and manufactured homes, include garages, workshops and varied similar combinations, and those properties are eligible for FHA financing, then it would follow that our combo garage/workshop which is a separate building from the manufactured home, would also be considered "residential" in this context. If not residental, what else could be meant -- commercial?
    2-7 ACCESS.

    A. Streets.

    1) Each property must be provided with a safe and adequate pedestrian or vehicular access from a public or private street.
    2) All streets must have an all-weather surface.


    ----- My comment: Our property meets this requirement. It accesses to a county-maintained hard surface public street.

     


    2-8 DEFECTIVE CONDITIONS. Defective construction, poor
    workmanship, evidence of continuing settlement, excessive dampness, leakage, decay, termites, or other conditions impairing the safety, sanitation or structural soundness of the dwelling shall render the property unacceptable until the defects or conditions have been remedied and the
    probability of further damage eliminated.

     ----- My comment: The term "the dwelling" must in context refer to the manufactured home, since all sections of Chapter 2 are referencing the living unit. The manufactured home on our property is the "living area". None of the above defects have been found in regard to the manufactured home.


    Even if the above is taken to apply to the unfinished combo garage/workshop as well as to the manufactured home, none of the defects listed can be found in the combo garage/workshop. The FHA Fee Inspector herself stated that the construction of the combo garage/workshop was extremely good workmanship. The building is sound, there are no hazards such as exposed live wires, etc.

    So it appears that our property meets this requirement also.
     


    The remaining sections of Chapter 2 have to do with Space Requirements (suitable living, sleeping, cooking, dining and sanitation matters) … Mechanical Systems (heating, cooling) … Ventilation (attic, crawl space) … Roof Covering (not defective) … Hazards (that adversely affect health, safety, or structural soundness) … Crawl Space (adequate access, etc.) … and Drainage (grading of the property).
    ----- My comment : Our property meets all the requirements of these sections.

     

    CONCLUSION:
    There is not one word in Chapter 2 of this HUD Handbook that says that an unfinished construction of a garage, a workshop, or any combination of same is unacceptable to FHA.

    If I've drawn incorrect interpretations or conclusions on any of the above, I'd appreciate knowing what they are. None of this is "my field", I can only apply a common sense analysis to it.

    One last comment -- if you go back and look at the reply from the FHA Resource Center, it states that if I have further questions I should contact my lender. IMHO this is just a laughable remark, the lender doesn't know squat. If a lender was qualified to evaluate a property for FHA financing, why would the lender hire appraisers and inspectors?

     
     
     
     


  21. #21
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    Default Re: FHA Appraiser Wants HUD Inspection

    Barb,

    I think you should be nominated for sainthood, for all of the run-around you've diligently gone through. Can I adopt you?


  22. #22
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by BridgeMan View Post
    Barb,

    I think you should be nominated for sainthood, for all of the run-around you've diligently gone through. Can I adopt you?
    Of course! Dad, I really really want to buy this house in Arizona .... can you help? LOL!


  23. #23
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    Default Re: FHA Appraiser Wants HUD Inspection

    I'm going to try again to make this SIMPLE.

    The accessory structure site built garage was never granted a certificate of occupancy, nor passed a final inspection. The former permit expired incomplete. The property changed hands.

    The "garage" is obviously in excess of 120 square feet.



    Therefore it does not meet the criteria, amognst myriad examples which include "
    To be eligible for FHA financing, a property must be in a condition and location that are free of all known hazards and adverse conditions that affect the health and safety of occupants, the structural soundness of the improvements, or impair the use and enjoyment of the property. "
    The garage may not presently be occupied. It was not granted a final approval or acceptance by the building official nor granted a certificate of occupancy. Therefore it is not "legal" to occupy - which is an adverse condition which impairs the use and enjoyment of the structural improvement to the real property, and is furthermore of a negative appraisal and liability value.



    Therefore the improvement is impaired, it is an adverse condition, in that it (the incomplete shop/garage/home theater "addition", "attachment" or close-proximity adjcent unfinished building may not be lawfully be occupied (as a garage or anything else).


    I (tried to) explain earlier how you might approach, such as applying for a permit with revised plans to simply finish to a minimum garage with reduced space between adjacent structure with required blocking, stopping and fire resistant construction, upgrading to present in-effect standards and gaining acceptance, final inspection and certificate of occupancy as a MERE garage, then obtain the "traditional" financing, and in some future time acquire construction financing to "upgrade" the adjacent not addition accessory garage to your dream workshop/movie room/whatever "attachment".


    It is much easier (and cheaper, materials-etc.) to get a final acceptance for a DETACHED but close-proximity accessory structure strictly garage & storage occupancy and finish fire resistant construction on parallel wall then to battle the "shop"/Home-Theater (LIVING SPACE)/garage some-day dream that you cannot afford to complete now anyway. You may even be able to DIY it with a revised plan, permit, fees, pre-inspection, and continued inspections, and guildance from the authority having jurisdiction (building official), and likely encouraged to do so as a completed, accepted improvement to the real property, an accepted and occupancy certificate granted, the garage can be added to the tax rolls by the assessor to be taxed as an improvement!


    You NEED to have a discussion with your Building Official's office and find out WHAT you must do to get the incomplete, stalled project of another, accepted and occupancy granted. Without that the "regular" underwriting guidelines will not have been met and the LENDER (FHA/HUD/VA/RUS programs are only an insurer GinMae/mc POOLS for investment re-sale) and they DO have recourse on the originator) will be held accountable for same. Getting it approved as a minimum unconditioned simple (but large) garage AS JUST a garage.

    Last edited by H.G. Watson, Sr.; 01-30-2013 at 07:34 PM.

  24. #24
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    Default Re: FHA Appraiser Wants HUD Inspection

    Quote Originally Posted by H.G. Watson, Sr. View Post
    I'm going to try again to make this SIMPLE.

    The accessory structure site built garage was never granted a certificate of occupancy, nor passed a final inspection. The former permit expired incomplete. The property changed hands.

    The "garage" is obviously in excess of 120 square feet.




    Therefore it does not meet the criteria, amognst myriad examples which include "
    To be eligible for FHA financing, a property must be in a condition and location that are free of all known hazards and adverse conditions that affect the health and safety of occupants, the structural soundness of the improvements, or impair the use and enjoyment of the property. "
    The garage may not presently be occupied. It was not granted a final approval or acceptance by the building official nor granted a certificate of occupancy. Therefore it is not "legal" to occupy - which is an adverse condition which impairs the use and enjoyment of the structural improvement to the real property, and is furthermore of a negative appraisal and liability value.



    Therefore the improvement is impaired, it is an adverse condition, in that it (the incomplete shop/garage/home theater "addition", "attachment" or close-proximity adjcent unfinished building may not be lawfully be occupied (as a garage or anything else).


    I (tried to) explain earlier how you might approach, such as applying for a permit with revised plans to simply finish to a minimum garage with reduced space between adjacent structure with required blocking, stopping and fire resistant construction, upgrading to present in-effect standards and gaining acceptance, final inspection and certificate of occupancy as a MERE garage, then obtain the "traditional" financing, and in some future time acquire construction financing to "upgrade" the adjacent not addition accessory garage to your dream workshop/movie room/whatever "attachment".


    It is much easier (and cheaper, materials-etc.) to get a final acceptance for a DETACHED but close-proximity accessory structure strictly garage & storage occupancy and finish fire resistant construction on parallel wall then to battle the "shop"/Home-Theater (LIVING SPACE)/garage some-day dream that you cannot afford to complete now anyway. You may even be able to DIY it with a revised plan, permit, fees, pre-inspection, and continued inspections, and guildance from the authority having jurisdiction (building official), and likely encouraged to do so as a completed, accepted improvement to the real property, an accepted and occupancy certificate granted, the garage can be added to the tax rolls by the assessor to be taxed as an improvement!


    You NEED to have a discussion with your Building Official's office and find out WHAT you must do to get the incomplete, stalled project of another, accepted and occupancy granted. Without that the "regular" underwriting guidelines will not have been met and the LENDER (FHA/HUD/VA/RUS programs are only an insurer GinMae/mc POOLS for investment re-sale) and they DO have recourse on the originator) will be held accountable for same. Getting it approved as a minimum unconditioned simple (but large) garage AS JUST a garage.
    Ah. Simpler is better with me Okay, I understand what you're saying here and will definitely check up on it. The previous owner was using both the garage "area" and the larger "area" for parking and storage respectively, and we have followed suit. Didn't realize we shouldn't be using the space, that it required or might require a Certificate of Occupancy first. We would know that about the actual living space, just not about the adjacent structure.


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