Confused Question please FHA Mortgage Req for Seller

[BozWalker]

What is the name of your state (only U.S. law)? NY

ok trying again
We are selling our home on Long Island NY and inspector has been in all parties agreed and the buyers went to FHA for mortgage.
Appraiser comes in and after 10 mins leaves and 2 weeks later files his report and this is what we are told...

FHA will NOT give the mortgage to the buyers unless we (sellers ) fix the following..

1- 2 garage doors that are peeling MUST be painted
2- two upper bedrooms in our home (levit homes built in 40s and 60s with radient heat in floor main level and chimney in 1 upper bedroom)
have no direct heat and we MUST install direct heat
3-We must install a banister

If we do not do this the appraiser wont give the buyers the fha mortgage

is this legal that the sellers must do this even if buyers are fine with it as is and contract even states as is?

 

[tranquility]

FHA will NOT give the mortgage to the buyers unless we (sellers ) fix the following..

1- 2 garage doors that are peeling MUST be painted
2- two upper bedrooms in our home (levit homes built in 40s and 60s with radient heat in floor main level and chimney in 1 upper bedroom)
have no direct heat and we MUST install direct heat
3-We must install a banister

There are checklists on the internet for FHA home inspection. A few certainly apply:

Chipped or peeling paint on interior or exterior of home and/or structures and improvements if home built before 1978.

Presence of the following may indicate unacceptable property condition:

Unit does not turn on
Heat is not emitted
Unusual noise
Smoke or irregular smell
Significant holes or deterioration on unit

And, while some would have "minor cosmetic damage" not be repaired like "Missing handrails", an open stair certainly would be dangerous.

You can review the requirements with:
http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4150.2/41502c3HSGH.pdf

 

[HUD-1]

Yes, the work will have to be done before closing for the buyer to get an FHA mortgage. Who pays for it is another question and that is negotiable.

 

[FlyingRon]

The paint is trivial. In the time it took you to post this question and wait around for an answer you could have slapped a coat of paint on the garage door.

If we're talking just a handrail on the side of the stairs, again less than $100 (and you could do it yourself in a couple of hours).
It's more involved but no big thing if it is a full bannister.

The heat you're not talking a tremendous amount. While it isn't tremendously ideal, throwing electric baseboard heat into a few rooms is probably about $2000.

The FHA is certainly legal in insisting that these deficiencies be addressed before they will finance.
If the buyer has a financing contingency (most standard contracts have this), you'll lose the sale without recourse if you don't comply.

If there is no financing contingency, you can try getting damages if they pull out, but if you really want to sell, you'll have to comply.