I've been selling off some homes in the last couple years. Some of them have foundation issues. This hasn't become a problem yet but the one I have for sale now is worse than the previous ones. I know this can be an issue with FHA financing but when does it become a problem with conventional 30 year loans? Is there a point where the appraiser will make a note and the lender will balk? I'd much rather drop the price of the house to reflect condition than deal with a foundation company. But don't want to spin my wheels if people can't get a loan. Thanks!

I really not sure. If the damage is showing, like doors off or wont open or shut, so obvious the appraiser will have to disclose it. But they dont actively look for it. Usually it comes up in the option period through inspection. Then its negotiated at that time and before appraisal. And yes you can do a price negotiation if the buyer agrees. \

Just have not seen it get to the underwriter much

SteveBott said:

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I really not sure. If the damage is showing, like doors off or wont open or shut, so obvious the appraiser will have to disclose it. But they dont actively look for it. Usually it comes up in the option period through inspection. Then its negotiated at that time and before appraisal. And yes you can do a price negotiation if the buyer agrees. \

Just have not seen it get to the underwriter much

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Thanks. Im not concerned about option period/ negotiation issues. Im used to that. And everything is listed on the seller's disclosure. And it's priced below market.

Im trying to determine the chance of the buyers lender, on a 30 year conventional, having issues. I haven't personally seen it but im being told it can be a- "do not proceed".

Has anyone personally experienced that?

Well if another lender cannot answer by monday I can email my lender account rep who is my go-to for these questions. My guess is its a decision by the underwriter who approves the loans. I am just not sure how Fannie/Freddie would advise. Basically the home have to be "safe, secure, and livable". A foundation does not outright break any of those standards. My wife and I lived in a home for 5 years on a bad foundation before we repaired it.

If an appraiser mentions it, it must be addressed

If the appraiser mentions it will be an issue. They will often take pictures of the what they feel are issues and make note in the report. If they do the underwriter often require an engineers report. and if the report shows the need for repairs, the repairs will be required. Often in these cases we provide bridge financing for well qualified borrowers to buy the property, fix the issue and the refi into perm financing.