Underwriting Issue - Water Structure

[pjdicke]

We have a lender that we were going with that said they would not approve the loan because of this large city water structure next door. It is a large water reservoir of some type that is governed/owned by the City of Norcross, GA. And it's about as far away as an average neighbor would be next door. It was the underwriters decision to not approve the loan, this is what our mortgage broker told us. The reason we were given is that some where within the FHA loan documents it states that the property can not be close to water structures or other things similar to this. My question is... is this true? Does it state somewhere in the FHA Loan requirements that the property can not be close to such structures and why? Where does it say that and what is it exactly it can't be close to, water towers, water tanks, old rusty water drum, private own, city owned?

if anyone can answer these questions it would help me understand. I am thinking someone isn't doing there job and just doesn't want to work with us.

[dsemler]

The issue is marketability of the property. The property has want is know as external obsolecense. That basically means something outside that affects its value.

Unless the appraisal can provide several comps that have this same issue, then the lender is not going to to this loan.

On the bright side, there are lots of house out there and maybe you can find one that does not have this negative influence. Think about it, this will probably be a harder house to sell down the road when you are selling.

Look for another home.