FHA appraiser appraised home $22K lower than offer, $7K lower than our requested FHA loan amount. What’s next?

This is a REO, owned by Fannie Mae. Will Fannie Mae see the appraisal report and choose rather to offer the home for appraisal amount, make some kind of offer for us to qualify for the FHA loan, or back out? If they back out will we get our deposit back?

Also FHA appraiser requested some repairs/inspections (i.e. roof inspection due to water stains on ceilings, kitchen faucet replacement) before releasing a loan.

Is this asking too much from Fannie Mae?

We are scheduled to close in escrow in 5 days and frustrated that all of this is happening only now. I admit I have begun to have emotional attachment to the home already.

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One Response to “FHA appraiser appraised home $22K lower than offer, $7K lower than our requested FHA loan amount. What’s next?”

  1. Expert Realtor says:

    The FHA appraisal has rendered an official value to the property. The purpose of the appraisal is to PROTECT you from overpaying for a proeperty.

    There are two options:

    1. You can simply walk away….there should be a clause in your sales contract that says if it doesn't appraise, the deal is dead.

    2. The seller CAN lower the price of the home to match the appraisal but is NOT required to.

    The bank will NOT loan one dime more than the appraisal..not one dime.

    The FHA appraiser DOES NOT release the loan…the bank does. The appraiser has no authority over it…the FHA underwriter isn't going to approve the appraisal of a home that has a leaky roof (that can cost thousands of dollars to repair), etc.

    So my questions to you are these:

    WHY do you want to buy a home with major problems?

    WHY do you want to pay more for a home than it's worth?

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