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Buying House With Deck Needs Repair
Case Scenario: A house that is being sold As Is due to a really bad deck that needs to be replaced. Will we have an issue with UW and getting this conventional loan approved? Seller is not going to make any repairs.
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2 Replies
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Thinking about buying a house sold as-is with a bad deck? Find out when you can use conventional financing and when you might need to fix the deck before closing.
Can You Get a Conventional Loan on a House Sold As-Is With a Bad Deck?A bad deck can impact your ability to get a conventional loan, but selling a house as-is is not always a dealbreaker.
You might be able to get a conventional loan on a house sold as-is with a bad deck, but the deck’s condition is still important.
The main issue isn’t whether the contract says the house is being sold “as-is.”
The real question is this:
Is the deck in a condition that affects the safety, stability, or strength of the property?
If the deck just looks old, needs some surface fixes, or has normal wear, the appraisal might still be done without changes.
But if the deck is in very poor condition, is unsafe, or might collapse, the appraiser may require repairs or replacement before the loan can be finalized.
If the seller refuses to make repairs, it doesn’t always end the deal, but it can cause financing issues if the appraisal requires repairs.
An As-Is Real Estate Contract Does Not Override Conventional Mortgage Property Requirements
This is a key point for homebuyers to know.
When a seller says:
“The house is being sold as-is, and I am not making any repairs.”
That’s mainly a negotiation between the buyer and seller.
It doesn’t mean the lender, appraiser, Fannie Mae, or Freddie Mac has to accept all property conditions.
The lender still needs to decide whether the house is sufficient collateral for the loan.
Put simply:
“As-is” does not mean “the lender has to finance it exactly as it is.”
If the appraiser finds a problem that affects safety, stability, or strength, the appraisal may need to be finished only after the problem is fixed. Fannie Mae requires appraisals to be conditional when such issues are found.is a bad deck still okay for a conventional loan?
Not every deck that needs repairs has to be replaced before closing.
There is a big difference between normal wear and tear and a serious safety or structural problem.
Small Deck Issues May Not Block Conventional Financing
Examples might include:
- Faded or peeling stain
- Surface damage
- Minor surface cracking. Worn boards that are still strong and und
- An older deck that is functional but nearing the end of its useful life
- Minor deferred maintenance that does not create a safety hazard
An appraiser might notice these issues, adjust the property’s value, and still finish the appraisal as-is.
Fannie Mae guidelines state that minor problems that don’t affect safety, stability, or structure can usually be noted in the appraisal rather than fixed before closing.
A Severely Damaged or Unsafe Deck Is a Different Situation
The situation is different when the deck is seriously damaged.
Examples that could create concerns include:
- Rotten support beams, Weak or failing support posts
- Noticeable shaking when walking on the deck
- Falling apart or badly damaged stairs
Loose support connections, where the deck attaches to the house
- Big sections of broken or missing deck boards
- Problems that clearly risk someone falling
- Damage that could make the deck fall down
There isn’t a rule that says a bad deck always has to be replaced for a conventional mortgage.
Instead, the appraiser assesses the deck’s actual condition.
If there is a safety, stability, or structural problem, the appraisal might require repairs, replacement, or another check.
It’s the Appraiser, Not the Seller, Who Decides How the Deck Is Reported
The seller can state that the deck is being sold as is.
But that does not decide what the appraiser will say.
The appraiser must report the property’s condition on their own.
Usually, there are three possible outcomes.
The Appraiser Determines the Deck Is Acceptable As-Is
This is the ideal situation.
The appraiser may notice delayed maintenance but decide it does not affect safety, stability, or structure.
The appraiser would then include the deck’s condition when figuring the property’s value.
The conventional loan may move forward without fixing the deck.
The Appraiser Requires the Deck to Be Repaired or Replaced
This makes the process more difficult.
The appraisal might be written:
“Subject to completion of repairs. The lender usually cannot ignore that problem.
After repairs are done, the lender may need proof the work is finished before approving the loan.
The Appraiser Requires an Inspection by a Qualified Professional
Sometimes, an appraiser can see a problem but is not qualified to judge how serious the structural issue is.
For example, the appraiser may see damage in the deck supports but cannot tell if the deck is still strong. Mae permits the appraisal to be made subject to an inspection by a qualified professional when the appraiser cannot adequately evaluate the condition. The lender then reviews the inspection and determines whether additional action is necessary.
Fannie Mae and Freddie Mac do not treat every property in poor condition the same way.
This is an important difference in conventional mortgages that buyers and real estate agents often overlook.
Fannie Mae May Permit Some C5 Properties to Close As-Is
Appraisers use property condition ratings ranging from C1 through C6.
A C5 property A C5 property usually has clear delayed maintenance and needs big repairs, but it can still be used and works. permits C1 through C5 properties to be eligible in as-is condition, but physical deficiencies that affect safety, soundness, or structural integrity must still be addressed.
This difference matters when a property has major delayed maintenance but no real safety or structural issues.
Freddie Mac has stricter rules for C5 and C6 properties
Freddie Mac’s current guidance is different.
A property with problems matching an as-is C5 or C6 rating is not acceptable for a standard Freddie Mac mortgage unless those problems are fixed before the loan is finalized.
So, the specific type of conventional loan can make a difference.
However, if the deck has a real safety, stability, or structural problem, switching between Fannie Mae and Freddie Mac should not be seen as a way to avoid fixing it.
The deck’s condition still needs to be checked closely.at Happens If the Appraisal Requires the Deck to Be Replaced?
This is when it really matters if the seller won’t make repairs.
Suppose the appraisal says something similar to:
“Appraisal is subject to replacement or repair of the deteriorated rear deck.”
The loan usually cannot close if the problem is not fixed.
Someone has to decide how the repair will be done. Seller Could Agree to Make the Repair
This is the easiest fix, but it doesn’t help if the seller refuses to do any repairs.
The buyer and seller could potentially renegotiate the purchase agreement, but the seller is not automatically required to agree.
The Buyer May Be Able to Pay for the Repair Before Closing
This sometimes happens, but buyers must be very careful.
The buyer doesn’t own the property yet.
Don’t spend thousands fixing someone else’s property unless you have the proper written agreements and approval from all parties.
You also need to consider insurance, liability, permits, access, contracts, and financing.
The loan officer, real estate agents, closing lawyer (if needed), and lender should all be involved before a buyer does or pays for any work before owning the property.
A Seller Credit Does Not Automatically Solve a Required Repair
This is another thing people often get wrong.
Suppose replacing the deck will cost $12,000.
The seller might say:
“I will give the buyer a $12,000 closing-cost credit instead.”
That might help with closing costs, depending on rules for seller contributions and other requirements. But a credit does not automatically satisfy an appraisal rule requiring the deck to be fixed before closing.
Giving money and actually doing the repair are two different things.
If the appraisal says the problem must be fixed, just giving the buyer money does not fix the unsafe condition.
Lender Escrow, the Deck Repair Until After Closing?
Fannie Mae allows lenders, if they choose and follow the rules, to hold money for certain small repairs that do not affect the property’s safety, stability, or structure.
Fannie Mae permits lenders, at their discretion and subject to applicable requirements, to escrow certain minor items that do not affect the property’s safety, soundness, or structural integrity.
But don’t assume you can just hold money for a badly damaged deck that needs full replacement until after closing.f the deck is a real safety or structural problem, it probably needs to be fixed before you can get a standard conventional loan.
Check with your lender before planning to hold money for repairs.
A Renovation Conventional Loan May Be an Option When the Seller Refuses Repairs
If the deck really needs to be replaced and the seller won’t do it, you might want to consider renovation financing. Fannie Mae HomeStyle Renovation could cover the cost of the deck replacement.
Fannie Mae’s HomeStyle Renovation mortgage allows eligible borrowers to purchase a property and include qualifying renovation costs within the financing.
The program is specifically designed for situations where repairs or improvements are part of the transaction.
With this loan, you don’t have to finish all repairs before buying. The loan is based on the home’s value after the renovations and an approved plan. Not all lenders offer HomeStyle Renovation loans, and these loans require extra paperwork and management.
Freddie Mac CHOICERenovation May Also Be Available
Freddie Mac offers a similar renovation mortgage called CHOICERenovation.
Freddie Mac specifically states that properties with C5 or C6 conditions may be eligible under CHOICERenovation when the conditions causing those ratings are cured through the renovation.
This can be a good choice if a conventional loan won’t work because of the property’s condition.
Do Not Assume an Appraisal Waiver Will Solve the Deck Problem
Sometimes borrowers hear:
“Maybe we can get an appraisal waiver and nobody will care about the deck.”
I wouldn’t recommend that approach. Even when the lender knows about a bad physical condition of the property, they may still need additional property checks.
Fannie Mae states that when a sales contract identifies repairs that are not minor, or that may affect safety, soundness, or structural integrity, a lender may need an appraisal rather than relying on value acceptance.
Freddie Mac similarly states that a seller may not accept an ACE appraisal-waiver offer when it is aware of an adverse physical property deficiency warranting an appraisal or property data report.
You should never use an appraisal waiver to hide or avoid a known problem with the property.
What I Would Do Before Moving Forward With This Conventional Loan
Since you already know the deck is in poor condition and needs to be replaced, it’s better to address the financing now rather than waiting until the end of the mortgage process. First, find out exactly how bad the deck is. There is a big difference between:
“This deck looks terrible and should eventually be replaced.”
and:
“This deck is structurally unsafe and cannot safely be used.”
Take clear photos and, if needed, get a quote or evaluation from a qualified deck contractor or other professional. Then talk to your loan officer about whether the loan is being approved for Fannie Mae or Freddie Mac. Whether the lender thinks the known condition might need more property review
- Whether a regular conventional loan is still possible
- Whether holding money for repairs is possible if the problem is really small
- Whether renovation financing should be an option
- What other options exist if the appraisal requires deck replacement
It’s much better to discuss these options early than to find out you need a $10,000, $15,000, or $20,000 repair right before closing. Bottom line: You can get conventional financing for a house sold as-is, but an unsafe deck can stop the closing.
The fact that the sellThe fact that the seller is selling the house as-is does not, by itself, prevent conventional financing.e to look perfect or be brand new, either.
What really matters is the deck’s actual condition.
If the deck is just old or has some wear but isn’t a safety or structural problem, you might still be able to close the loan as-is, depending on the appraisal, lender, and agency rules.
But if the deck is unsafe or structurally damaged, the appraiser may require repairs, replacement, or another expert inspection. If the case and the seller won’t make repairs, you may need to consider other options, such as approved pre-closing repairs, renegotiating the deal, or using a renovation loan like Fannie Mae HomeStyle Renovation or Freddie Mac CHOICERenovation.
The first thing I’d want to know is exactly what’s wrong with the deck. Is it just worn out, or is it really unsafe or structurally damaged? That difference can completely change your loan options.
Frequently Asked Questions About Conventional Loans and Houses With Bad Decks<div>
Can You Buy a House As-Is With a Conventional Loan?
Yes. Conventional loans can finance houses being sold as-is. The property does not have to be in perfect condition. However, known conditions that affect safety, soundness, structural integrity, property eligibility, or marketability may require additional review or repair.
Will a Conventional Appraiser Require a Bad Deck to Be Replaced?
Not automatically. The appraiser must evaluate the condition. An older or cosmetically damaged deck may potentially be acceptable as-is. A deck that is structurally unstable or poses a significant safety concern is much more likely to require repair, replacement, or inspection.
Can a Conventional Loan Close With a C5 Property Condition Rating?
It depends on the conventional agency and the specific condition. Fannie Mae can permit certain C5 properties as-is when the deficiencies do not affect safety, soundness, or structural integrity. Freddie Mac generally requires conditions consistent with an as-is C5 or C6 rating to be cured before a standard mortgage is delivered.
Does an As-Is Contract Mean the Appraiser Cannot Require Repairs?
No. The as-is language is part of the purchase agreement between the buyer and seller. It does not prevent the appraiser from reporting a condition or the lender from requiring the property to satisfy conventional eligibility requirements.
Can the Seller Give the Buyer Money Instead of Replacing the Deck?
A seller may be able to provide an allowable seller credit subject to conventional financing rules, but a credit does not automatically satisfy a required property repair. If the appraisal requires the deck to be repaired before closing, the physical work must generally be addressed in accordance with the lender’s requirements.
Can the Buyer Replace the Deck After Closing?
Potentially, if the deck condition is eligible to remain as-is, and the lender does not require replacement before closing. If the appraisal or lender makes replacement a condition of the mortgage, the buyer cannot simply promise to complete it later unless an approved financing or escrow structure specifically permits that arrangement.
Can a Buyer Repair the Deck Before Owning the House?
It may sometimes be possible, but it should never be done casually. The buyer does not yet own the property. Any pre-closing work should be coordinated with the seller, lender, real estate professionals, insurance parties, and, where appropriate, the attorney, with the necessary written permissions and agreements.
Can a Repair Escrow Be Used for a Bad Deck?
Possibly for minor qualifying repairs, depending on the lender and loan structure. A repair escrow should not be assumed available for a serious safety or structural defect. Fannie Mae’s standard guidance allows lender-discretionary escrows for certain minor conditions that do not affect safety, soundness, or structural integrity.
What If the Appraiser Cannot Determine Whether the Deck Is Structurally Safe?
The appraisal may be made subject to evaluation by an appropriately qualified professional. The lender can then review that professional’s findings to determine whether repairs are required.
Can We Switch Conventional Lenders If One Lender Requires the Deck to Be Repaired?
Changing lenders does not eliminate Fannie Mae or Freddie Mac property requirements or make a genuine safety or structural defect disappear. However, lenders may apply different overlays, and Fannie Mae and Freddie Mac differ in how they handle property condition ratings. The complete appraisal and loan structure should therefore be reviewed before assuming the transaction cannot be financed.
Can HomeStyle Renovation Finance a New Deck?
Potentially, yes. Fannie Mae HomeStyle Renovation permits borrowers to purchase a property while financing eligible repairs and renovations as part of the transaction, subject to the program’s appraisal, contractor, borrower, and lender requirements.
One point I would keep exactly as written is the Fannie Mae versus Freddie Mac C5 explanation. That distinction makes this response substantially stronger than the typical generic answer that simply says “conventional loans allow cosmetic repairs.” The current Freddie Mac Guide is explicitly stricter with as-is C5/C6 deficiencies.
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That’s going to be a health and safety issue. The only ways around that are –
Get a contractor to repair the deck and get paid at closing
Decommission the deck and block off the doorway by boarding it up or even using 2x4s.
I have closed them by using 2 2×4 and negating the access to the door
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