Is there a law that says that seller has to pay for certain repairs if the buyer uses a FHA loan?

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Is there a law that says that seller has to pay for certain repairs if the buyer uses a FHA loan?

We are trying to buy a foreclosure property. Our offer was accepted and we will get a FHA loan. Our realtor tells us that our bank will only give us the mortgage if certain repairs are made to bring the property up to FHA standards. But the seller (bank) refuses to make repairs; it is selling as is. We could get a rehab loan but the sellers refuse to go down with the price and our bank won’t go higher with the loan. Our realtor says we might have to fix the house with our money before the closing in order to get the mortgage or lose the house. That whole situation just seems so wrong to me.

Asked on October 28, 2011 under Real Estate Law, Florida

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

With a FHA approved loan, there are requirements that if there are neded repairs to a home that are beyond cosmetic issues that they must be repaired before close of escrow preferably by a licensed contractor.

Given this situation that you are facing, you can ask as part of the negotiations to close the sale that the seller pay for such needed repairs or give you as the buyer a credit off of the purchase price of the home so that the repairs can be done.

The FHA requirement for repairs needing to be done before close of escrow is a condition of it approving the loan to you. The seller has no obligation to give you a credit for the repairs or make the repairs before close of escrow.

Good luck.


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