We're pre-approved for a fixer upper with bridge loan. Lender was told about its many issues but wants to see inspection report. Can lender back out?

We're pre-approved for a fixer upper with bridge loan. Lender was told about its issues but now wants to see inspection report. Can lender back out? It's an FHA bridge loan.
Lender was told the home needed new boiler, plumbing, mold removed, etc; We have money set aside for repairs but maybe lender will think that's not enough money, not sure. We have various licensed union trade workers in our family who plan to do the majority of the work at a discount because we're related. What can we do if lender/bank says no this house is a money pit/repairs too much? They already pre-approved and we're suppose to close in 32 days. I may be borrowing trouble, but want to be prepared as we love the house and really want to own it.
(0) | asked by: mary gannon | share | 1 month ago | Report
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answer by Peggy A. Cain    |   Visit My Website   |   Contact Me
FHA loans have guidelines that the home and lender must meet. It is up to the lender to be sure that the home qualifies. It may seem sometimes that the lender is being overly particular but they are protecting and you and themselves from making any mistakes.
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2 weeks ago  |   Report   |   share
answer by Darrell White    |   Visit My Website   |   Contact Me
A Lender does have the right to back out. Having a pre-approval is the first step in the home buying process, however their are more steps through the underwriting process that occur before you reach loan commitment. Your Lender may feel better after the appraisal comes back at or above the purchase price, typically they don't want to see the inspection report. Perhaps their Bridge Loan program requires this. Also, make a few calls to other Lenders and see what they require, I once had a Buyer switch their lender 2 weeks before closing because of stupid underwriting demands. Of course before switching, you would need the seller to agree to that. Hope this helps, good luck.
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3 weeks ago  |   Report   |   share
answer by Ed McKeown    |   Visit My Website   |   Contact Me
You do have a responsibility to the lender since they do want the home to be in good condition as a condition of the loan. I have done 203K loans with a consultant for the bank involved and have done some with escrow for repairs. The lender usually asks for the report or their appraiser/consultant evaluate the home and loan value. Everything may have to be documented to proceed. If you do not comply you risk no loan anyway. Ask your contractors to write it up and submit it. Usually the bank pays the contractors directly.
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4 weeks ago  |   Report   |   share
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