Hello James,It would not nullify the appraisal but would require the appraiser to make a second trip to the home to reinspect it for completion. This will enable him/her to issue a notice of completion and recertification of value. There is a cost associated with this. Or if the work is close to completion now, you can wait and have the appraisal completed after the work is done.

Hello Erika, Typically, a travel trailer on wheels that you hook up to a truck and take off in would not be considered one way or the other when appraising real property. Trailers and RV's that are mobile and used for traveling but are just parked on your property between trips would normally not even come into the equation, but it sounds like your trailer is much more sedentary, and with the built on deck, is being considered an Accessory Dwelling Unit (ADU), and not a travel trailer. You're partially right that HUD has no rules about parking a car, truck, or RV on your property, but they address potential living units. HUD has definite rules for properties with ADUs, including zoning compliance, size requirements, and other considerations. The ability of the lender to allow the full kitchen in an ADU such as yours and not require the homeowner to strip the insides of the unit for it to be eligible for the HUD HECM reverse mortgage loan often depends on the zoning as well. Many times it is the local municipality that that has jurisdiction over the property that determines what is legal for the area. Remember that the lender cannot require you to strip it, remove it, or remove anything from the trailer. All they can do is tell you under what terms they are willing to complete the loan, and then it is up to you to decide if you are willing to accept the loan based on those terms. I do not know how long they have had the information they have before they gave you this condition. Typically, the determination is only made at underwriting, and that happens after all information is collected and the loan is submitted for underwriting (particularly the appraisal). Before receiving the appraisal and all other documentation, the lender's underwriter cannot render an underwriting decision. I am certainly not defending or condemning the lender in this action because I don't know how long they had your loan or when they received your appraisal. But if they have had your appraisal for longer than a few weeks, it is a fair question to ask them why they did not bring this up to you sooner, especially if they had your complete repairs and did an inspection for that work. If they had other appraisal concerns (as it sounds like they did if they had your complete repairs), then all concerns should have been addressed at the same time.

Hello Kevin, Lenders and HUD know that homes are still subject to wear and tear and need maintenance and replacement of different components from time to time. It is not a reason to call the loan due and payable. If they lost their insurance because no one was willing to insure the home because of the roof's age, that would be a reason to call the loan due and payable (lack of insurance), so you want to be sure you have the insurance in place. You can contact the servicer at any time and request a change in how the available funds are sent to you, and if you have funds still available on a line of credit, that isn't even a change. It's just a draw request. If you need to change the way the funds are disbursed (i.e., lower the payment amount to allow for a line of credit draw), you don't even need to explain why you want to make the change, it is within your right to do so, but you may need to pay a one time minimal fee to change the loan payout from the monthly payments to the new option. Any way you look at it, the loan funds are available to mom and dad for whatever purpose they need/want, and there is no problem using them to improve or maintain the home.

Hello Sara,You can be approved if your house is older and the condition is comparable to other older homes in the area, and there are no repairs such as health and safety concerns. Many repair items can also be completed after the loan has been closed. Things like chipping and peeling paint, exposed wiring, stairs with no railings, etc., are health and safety hazards. They must be repaired before closing but allows borrowers to set funds aside to complete many other repairs aft the loan closes. And suppose the condition is just a little old and not so great. In that case, the value will be considered when the home is compared to other sales in the area. It may affect the appraiser's final value estimate but may not require repair to complete the loan. The only way to know what will be required is to complete the appraisal and see what items the appraiser reports. If there are specific repairs you know are necessary, you can always point them out to your lender in advance. They can usually tell you if it will need attention before the loan can close. Here again, most items can be completed from loan proceeds after the loan closes with a set aside where the lender puts money aside to complete the repairs (assuming you have the proceeds available after any current loans on the property are paid off). It never hurts to check, and I always advise borrowers to let your lender know everything you can in advance because the appraiser will most likely find it when they make their physical inspection of the property. If there is an issue, better to find out before you pay for an appraisal than after if you could have known all along.

Hello Phil,I am unaware of any reverse mortgage program that would accommodate such a property. Properties must be zoned residential and readily marketable, which means that even if they are zoned residential (not industrial warehouse), you would still need adequate recent sales of similar properties for the appraiser to justify the conclusion of valuation. HUD would not insure a loan on this type of property. I do not know of a private reverse mortgage investor who allows such properties in their programs either.

Hello Cordelia,A reverse mortgage can never be contingent upon a home warranty policy. Are you sure it is even your company sending you the notices? You do not have to buy a home warranty. If you feel you are being threatened to do so by a lender or third party posing as your lender, you can contact your state regulators or the CFPB and send them copies of the notices you've received, asking them to help you stop the harassment. I suspect it is a separate company trying to sell you a policy and that they are not associated with your lender. If so, they may be posing as a company you already dealt with when you did not, and in that case, you should seek assistance from the regulatory authorities who can stop this abuse.

Hello Lela, Your reverse mortgage agreement does not forbid you from using your property in a manner that is allowable by law if the loan security is not impaired. In other words, if you still live in your property as your primary residence, bringing in a tiny home for your caregiver to live in that does not alter the structure. So, if it is permitted by the local ordinance (zoning laws), there would be no reason you could not have the structure on your property. There are provisions in your Deed of Trust/Mortgage (you will have either one or the other - a Deed of Trust or Mortgage depending on where the property is located, which secures the Promissory Note for your loan) that call for the occupancy, preservation, maintenance, and protection of the property. The Deed/Mortgage states (among other things) that you cannot substantially change the property. A tiny house would be considered an Accessory Dwelling Unit (ADU) that would not usually be considered a substantial property alteration, especially if it is not even attached to the main dwelling. Still, it could create issues depending on the circumstances if you let it. If you plan to bring in a temporary structure, if it conforms to zoning laws and does not in some way create an excessive amount of wear and tear to the main structure or devalue the property (and most ADUs would not, but a dilapidated structure might), there should be no issues whatsoever. If the ADU created additional governmental charges to you, you would be responsible for paying those charges, and failure to do so would be the same as failing to pay property taxes in a timely manner. It could ultimately result in the loan being called due and payable if you allowed those charges to go into default. Again, probably not something you are planning to do but just something you need to be aware of.

Hello Maria, Let me start with your last question first. You can always shop around to see if a lender will allow you pay for your appraisal at closing. This is a double-edged sword though. If you compare not only the appraisal arrangements but also the costs and interest rates for the loan (the costs and rates will determine what you might receive with the loan as well as the total costs to get the loan even if they are added to the loan balance and the interest accrued over the life of the loan), you may find that the "better deal" for the appraisal which is not one of the higher costs ultimately for the loan can cost you tens of thousands of dollars in the end. If you pay a higher margin, interest rate and higher fees to get a lower appraisal fee or one that the lender allows you to pay later, it could easily mean you get thousands of dollars less money available to you when you close the loan based on the way HUD determines the available funds with the expected interest rate. And if the margin is higher, you will accrue more interest on the funds you borrow which, depending on your borrowed amount, could mean tens of thousands of extra dollars of interest accrued over the life of the loan. If you do not plan to ever leave the home to heirs or move and sell the house later, maybe the interest accrual is not a concern to you, but most people get the loan because they need the money and o I would caution everyone to look at all the numbers and not just the appraisal cost. The appraiser is the eyes of the lender and HUD in the field and the appraiser does not make the determination as to when repairs are too extensive to not make a loan, the lender makes that call. The appraiser will call out certain issues though that must be corrected for his/her appraised value to be used and in those cases, the appraiser will make the report "subject to" repairs. Otherwise, the appraiser will note the needed repairs and adjust the property's value accordingly in the report based on the condition of the properties to which he/she compares the home during the appraisal process to determine a value. Some foundation issues are normal with aging and are to be found in many properties in certain areas. Some are serious and many not be acceptable as is but can be if repaired. My suggestion is to take pictures of your property issues and let your lender know of all the issues from the start. Let them see what they are working with so that they will know exactly what the appraiser will see when they do their inspection. Are their cracks in the driveway or is there major damage to walls and chimneys, etc.? Have you had a contractor give you any estimates for work to correct it? If so, show that to the lender as well to get their opinion before you pay for an appraisal. There are also some companies who specialize in FHA repairs, and you may be able to find one that will do the work knowing you are going to get a reverse mortgage and allow you to pay for the work after the loan closes. I caution you if you choose to go this route though because if the work needs to be done before the loan can close, you need to find a licensed contractor who is familiar with the whole process and who will not be looking to be paid in a week after the work is done and one you feel comfortable with. The construction work is between you and the contractor and if you do not like the work, the lender is not involved so they cannot help you with any disputes, so I advise that you make certain you understand fully all terms before you undertake this kind of action. But if the work can be done after the loan closes or is not severe enough to stop the loan from closing, the lender may be able to tell you that before an appraisal is performed with the pictures (remember, they are only looking at one aspect if you send them pictures of the foundation issues and that is no guarantee that there are no other possible impediments not known to them at that time). If the cost of the appraisal up-front is so great a factor to you and outweighs other concerns, you can certainly shop around until you find a lender who is willing to advance this fee for you and chances are pretty good you may find one. It will probably cost you more in the long run but if it is the only way you think you will get the loan and that is more important to you that anything else, that is a call that only you can make. I would just advise you to still compare as many as possible.

Hello Joanne, If the property was damaged prior to the loan closing, the property would need to be repaired prior to closing. If the repairs could not be made before the appraisal expires, the home would need to be reappraised at that time. If the damage was done after the loan closed, the home would be repaired with the insurance proceeds and the lender would also be named as a loss payee on the insurance policy to be sure that their interest was covered.

Hello Kathleen, HUD has specific parameters that must be followed and then different lenders offer different terms according to their lending guidelines. To see what you can and cannot get from the loan, you should visit several online calculators to see what various lenders will offer.The HUD program will ultimately decide how much money you can take and when, but the interest rates charged by the lender may affect those numbers so it is important to compare. Also, don't forget to check with third-party, non-interested review sites like the Better Business Bureau to verify the ratings of the lenders you want to possibly work with.

Hello Deborah, When you use the home or property for commercial uses (which would be the case with VRBO or Airbnb), the home does not meet the eligibility guidelines for the HUD reverse mortgage program. HUD will allow you to rent out a room or legal units on your property that conform to zoning for minimum periods of month to month or longer tenancy so that the occupancy is not transient. However, nightly rental is considered hotel or hostel type usage and therefore more along the lines of commercial usage and not allowed by HUD. The lender was correct that HUD would not have allowed it under the program. You can rent the home as long as it meets zoning requirements to a more permanent tenant if you prefer and still get a reverse mortgage but it would need to be removed from all rental marketplace listings and no longer rented as a short-term rental.

Hello Patricia, Not only is it ok, it is encouraged. You agreed in your loan documents to maintain your home and that includes replacing or repairing your roof and other components of your home as needed. The only time you need your lender's input is if you plan to substantially change the home and it might alter the value of the property. But you have not obligation to check with your lender first before doing maintenance or repairs on your home.

Hello Phillip, It is very unusual for a lender to do physical home inspections of the condition of the home unless they are conducting another inspection and something pops out (i.e., an occupancy inspection and while there it is clear the roof is collapsing). The lender would work with HUD to determine what steps should be taken to alleviate the deferred maintenance and since I honestly do not know anyone who has been in this situation, I cannot say what they would do. I know there are programs and grants available for seniors in need of home repairs and would suggest you look into the possibility of something like that in your area. The program does not require borrowers to purchase and maintain a home warranty so it would be completely up to the borrower as to whether or not she ever got one.

There are three issues here: 1. Alterations to the property2. The ability to take a loan out using a property you do not own as collateral3. The reverse mortgage becomes due and payable when the borrower no longer lives in the home so would these changes improve the value As part of the Deed of Trust or Mortgage, the loan documents say this about building on the property:

Borrower shall not commit waste or destroy, damage or substantially change the Property or allow the

Property to deteriorate, reasonable wear and tear excepted.

This means that borrowers can make minor alterations to their property as they see fit but if the building your sister would like to do is considered a substantial alteration, your mom could be in violation of the terms of the loan and the lender could call the loan due and payable if they were to conduct an inspection and deem the alterations a substantial change of the property that could impair the lender's security. The changes could be deemed an impairment because of too little insurance, substandard construction, lack of conformity to other properties in the area that rendered the home less salable or other issues that one might not even consider. Most people think "more square footage = more value" but that is not always the case and if the zoning or the property no longer meets HUD's guidelines, the documents do allow the lender to call the loan due and payable. This is standard verbiage for most loans. About the ability to take out a loan to complete the construction, I am not aware of any lender who would grant a loan to someone who is not the title holder on the property. Most lenders do not like the idea of going into junior lien position behind a reverse mortgage because the loan has no definite payback date, and the balance can continue to increase. Add to that the fact that your sister doesn't even own the home and I think it is safe to say that it would take some sort financing other than a standard construction loan to complete such a project. Perhaps a personal loan to your sister without using the property as collateral. But that leads me to the third item on the list above that would make the personal loan riskier. The reverse mortgage becomes due and payable when the borrower permanently leaves the residence. If your mom passes or must move to permanent assisted living/nursing facility, the loan becomes due and payable. If the home does not sell for enough to pay off the reverse mortgage balance plus any other loans your sister takes to build on the property, she if she uses other financing secured by her personally, that debt would stay with her even after they had to sell the home and move.

Hello Walter, Any loan that is secured by real property encompasses the legal description of the property and any real property improvements thereon. It does not include any personal property, but real property is anything that is attached to the land which includes additional buildings that are not temporary buildings that are not affixed to the land. If there is more than one structure on the property that is also a permanent structure, it is considered real property and is also covered by the lien since you cannot separate real property. In other words, you cannot foreclose on part of the property and not the whole so if the lender did need to foreclose to protect their lien position, that would include the entire legal property and all buildings attached to the land. However, mom's heirs have the right to keep the home by paying off the loan at either the amount owed or 95% of the current appraised value, whichever is less after mom passes and that includes the son. If there are other heirs, they may also have rights to the property though so that would be something the son would need to work out with any other heirs. But the lender would not be involved in that. If the heirs, any of the heirs, repaid the obligation when the loan became due and payable, the property would remain with the family. The heirs could also choose to sell the property and that would also be their right, but the loan would become due when mom passes and that since that loan encompasses the entire lot, it would affect all improvements on the land.

Hello Fred, The terms of your reverse mortgage state that you would not make major changes to the home and that you would continue to occupy the property as your primary residence. I would advise you to contact your lender to verify that the changes you would like to make would satisfy these requirements.

Hello Richard, HUD will allow some mixed use as long as the property is zoned for it, the property conforms to the marketplace, is primarily residential in nature and there are adequate sales of similar properties to support the value and marketability of the home. However, the maximum that HUD will allow is 25% commercial usage.

Hello Gina, To protect the lender's and HUD's interest in the property, they have the following language in the Deed of Trust or Mortgage:

"Occupancy, Preservation, Maintenance and Protection of the Property; Borrower's Loan Application; Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's Principal Residence after the execution of this Security Instrument and Borrower (or at least one Borrower, if initially more than one person are Borrowers) shall continue to occupy the Property as Borrower's Principal Residence for the term of the Security Instrument. Borrower shall not commit waste or destroy, damage, or substantially change the Property or allow the Property to deteriorate, reasonable wear and tear excepted.

Borrower shall also be in default if Borrower, during the loan application process, gave materially false or inaccurate information or statements to Lender (or failed to provide Lender with any material information) in connection with the loan evidenced by the Note, including, but not limited to, representations concerning Borrower's occupancy of the Property as a Principal Residence. If this Security Instrument is on a leasehold, Borrower shall comply with the provisions of the lease. If Borrower acquires fee title to the Property, the leasehold and fee title shall not be merged unless Lender agrees to the merger in writing."

If you notice, the clause does not state that you cannot improve the home by making a ½ bath a full bath or that you cannot improve the borrower's ability to live in the home. The concern is that if a borrower were to make major changes to the home or alterations done without permit and with inferior workmanship and materials, the property would become less valuable and therefore a greater risk to HUD and the lender. Simply remodeling the bathroom is usually not a substantial change in and of itself. But let us look at this from another angle. If by enlarging the downstairs bathroom it would remove a bedroom and the home would become a 2 bedroom home instead of a 3-bedroom home, that could be a substantial change in some markets causing a large loss of value. In that case, it would be considered a substantial negative change. If enlarging the bathroom means more than taking a little space from a closet or two and would alter the bedroom/bathroom count, I would suggest you submit your plans to the loan servicer for approval in advance to be certain you are not in violation of your loan terms as agreed to in your loan documents.

Hello Ramon, Your question is a very good one and, in all honesty, I cannot give you a straight yes or no answer. The terms of your loan require the borrower to live in the home as their primary residence but in addition to that requirement, the borrower is not allowed to substantially change the property or allow the property to deteriorate. If by this question you mean can you watch children and you do not substantially alter the home while still living in the property as your primary residence, I would have to say that you probably would have no issues even though you would not be able to get the loan to begin with if more than 25% of the property was used for commercial purposes. However, since you are using the term "convert" the home, that indicates that you are considering making changes to the home to make it more daycare friendly and less like the single family residence on which the reverse mortgage was approved. In that case, the lender could call the loan due and payable if they did an inspection and determined that you were not in compliance with the terms of the agreement.

Hello Kristy, Unfortunately, I can't give you a yes or no answer for absolute sure but I would tell you that this is a requirement of most state codes and most appraisers will call this out if the door is not a rated fire door or even if the door is there if an owner has cut a hole in it for a "doggy door". You can always choose not to do anything until after the appraisal if you want to wait and see if the appraiser requires it though. The appraiser is the eyes and ears for the lender in the field and he/she will be the one who tells the lender if the local code requires the property to have any changes or updates in order to meet all health and safety codes, but as I stated, it is a common requirement. If knowing that the door might have to be replaced would be the difference of whether or not you did the loan, that might be a decision you have to make before you allow the appraisal because the chances are very good that if you don't have one now, the appraiser will make this a requirement. If you would go through with the loan even if you had to get the new door, my advice to you would be to consider replacing the door before the appraisal, but that would be your call. There is obviously a cost to replace the door and many people want to be sure the loan is approved, and everything is set before they do any repairs. There is merit to this school of thought if you think you might not want to do the loan or may not be approved but if you are fairly sure you will ultimately be going through with the loan, all you would be doing by waiting in most instances is cause additional delay while the door must be installed and then the appraiser would have to be rescheduled to do the inspection of the installation. And there is an additional cost of $175 - $200 in most instances for the reinspection and the additional completion form for the appraisal (almost as much as the cost of your new door). But that call would be yours to make. Aside from the safety aspect of having the correct fire protection by putting in the fire door whether you do the loan or not, almost doubling the cost of the project by making the appraiser make a second trip usually isn't in your best interest.

Hello Heather, For the most part, the home must meet the HUD minimum requirements at the time the loan is closed. If the roof is currently leaking or if the wiring is such that it is a health hazard (exposed or non-functional), that would be required to be repaired before the loan would be allowed to close. In some cases, borrowers can get a repair set-aside approved wherein the lender can put one and a half times the cost of the repair aside from the loan proceeds for a period (usually 90 days to 180 days) to allow for some repairs such as a worn roof. Again though, if the roof is currently leaking and causing further damage or if the needed repairs are such that they impair the habitability of the home or cause a health and safety issue, those repairs would be required to be completed prior to the closing of the loan. There are some construction companies that bill themselves as FHA friendly companies that will do repairs and accept the payment after the loan closes. If you choose to investigate this work, remember that the work is between you and the contractor, the lender is not involved and cannot help you if you are not happy with the quality of the work completed. You typically have to sign a contract that if you cannot complete the loan within a set period of time, the contractor can place a lien on the property and there are various provisions that could come into effect for repayment of that lien. Just make sure that you have done your homework on verifying the references of the contractor, that you have a loan approval first so there is no doubt you and your property qualify (other than the needed repairs) and you fully understand the terms of the work. We have seen some very happy borrowers who have used this type of scenario but also some who were very unhappy, especially if they entered into a contract to have the work completed and it turned out that their property was not eligible to begin with.

Hello Doris,If his house is like other homes in the area as far as the house and the size of the lot, it should not be difficult for him to apply for and receive a reverse mortgage if he qualifies under HUD's property requirements.If he is living in the home and has been since it was completed, occupancy would not be an issue and if the 13 acres are not being used for agricultural purposes, he meets HUD requirements in those regards.If there are no other properties like your brother's home or on anywhere near 13 acres, that could present a problem as the appraiser would not have any similar properties, he/she could use to determine a solid value though. Not all homes are eligible for the HUD insured financing. The only way for him to find out if his property will qualify would be to speak to a lender. Hopefully there is enough online information that they can give him a good idea of the acceptability of the property, but it might take an appraisal from an FHA-approved appraiser to know for sure.It's always best to talk to the lender and be completely open about your home if you have a unique property, one that requires repairs or in any way does not conform to the other properties in the area.Lenders do not want you to spend the money for an appraisal if they know your home does not meet HUD guidelines for some reason but often do not know unless the owner happens to mention something during the conversation.We often can't tell that there are power lines over the property, that there is commercial or agricultural use of the home, or that there are other factors nearby that would render the home ineligible for HUD/FHA insurance, unless the borrower tells us or until it is reported in the appraisal.In this case, the 13 acres alone would not disqualify your brother but certain uses, extreme uniqueness or external influences might so I would encourage your brother to take the time to talk to the loan officer if he is concerned about these issues from the start.If not, then he can start shopping a little with a few lenders, get the loan he feels is best for his needs and set up his required counseling.

Hello Robert, If you are still within the zoning laws and all improvements are up to code, yes, you certainly can add an accessory dwelling unit with you living in the main property.

Hello Sheldon, You can generally make any improvements to the property, but you are not supposed to do anything that lowers the value of the property. I would have to refer you to your lender and then possibly to an attorney for legal advice on this point. I would not feel comfortable advising you about whether or not filling in your pool would qualify as an appropriate repair to the property and not something that would lower the value.

Hi Lori, That depends. HUD does allow some business use of the property, but the home must be zoned for residential and must be primarily residential and in a residential area. No more than 25% of the home may be used for business purposes and some people begin to get caught up on how that percentage is calculated at times. For example, if you use a room in the house to run a bookkeeping service and that room accounts for 20% of the total square footage of the home and the house doesn't have signage that makes it look like a CPA office (it still looks like a house in a residential neighborhood), that would meet HUD's requirements. If you ran a kennel though and even though the kennels did not utilize more than 25% of the property, that might well be disallowed as there really isn't a way to restrict the animals to just the kennels and the usage is no longer primarily residential. If you have a question as to whether your home-based business would qualify, a lender should be able to let you know very quickly once they have all the information. I would just be open and honest so that you aren't waiting until they receive the appraisal to find out that the business usage is not quite what was presented and now you've spent money on an appraisal when the loan cannot be granted.

Hello Carol, The appraiser will not even ask about it if it is in good repair and it looks like it was done in a workmanlike manner. He would probably start asking additional questions if the patio appears to be in disrepair or if it looks to be a hazard, but then again, he could require additional information or repairs under those circumstances even if it was constructed with permits.

Hello Diana,The terms of the reverse mortgage require at least on of the original borrowers of the loan to live in the home as their primary residence. Once there are no remaining original borrowers remaining in the home (such as would be the case if the home became a rental), the loan would become due and payable.