49. A couple's offer was accepted out of 12 other offers, which was surprising because they were only putting 3.5% down with an FHA insured loan. If the appraisal comes in $15,000 less than the agreed amount, which of the following would be acceptable to the FHA?
Answer: C
Paying the $15,000 difference between contract price and appraised value is acceptable to the FHA.
In the case where the appraisal comes in $15,000 less than the agreed amount, the FHA allows buyers to pay the difference between the contract price and the appraised value. This ensures that the loan amount remains within acceptable limits for FHA insurance.
A) Making sure this loan is not insured because of the lower appraisal
This option is incorrect because the FHA does not require that a loan be uninsurable solely due to a lower appraisal. Instead, the FHA provides solutions for situations where the appraisal is lower than expected, allowing for adjustments rather than defaulting the loan insurance.
B) Giving the improvements more value and adding money to the appraisal
This option is not acceptable as it misrepresents the appraisal process. Appraisals must reflect the true market value based on comparable sales and property condition, and artificially inflating the appraisal value to meet the contract price is against FHA guidelines.
C) Paying the $15,000 difference between contract price and appraised value
This option is correct because the FHA permits buyers to cover the difference in order to proceed with the purchase. This practice allows the transaction to continue, ensuring it remains compliant with FHA requirements while addressing the appraisal discrepancy.
D) Allowing the buyers time to find a property closer to their approved loan amount
This option is incorrect as it does not address the immediate issue of the appraisal discrepancy. While buyers may seek a different property, the FHA specifically allows for the current transaction to proceed by covering the appraisal gap rather than delaying the process.
Conclusion
Option C is the only choice that aligns with FHA guidelines, allowing buyers to pay the difference when the appraisal is lower than the contract price. Other options fail to provide viable solutions within the framework established by the FHA, either misrepresenting appraisal practices or not addressing the issue at hand.