"Subject To Roof Replacement": When Your Lender Won't Fund Without a New Roof

The Call That Changes Everything

It's 3 PM on a Wednesday. You're 18 days from closing. Everything has been smooth—inspection went well, appraisal was scheduled, you're already booking movers.

Then your real estate agent calls with a tone you haven't heard before. Not quite panic, but definitely concern.

"So... the appraisal came back. The value is fine, but there's a condition. The appraiser is requiring the roof to be replaced before the lender will fund the loan. Says it's at the end of its useful life."

Your heart drops.

"Wait, what? We passed the home inspection. Nobody said the roof needed to be replaced. We're closing in 18 days!"

Welcome to the nightmare scenario: appraisal-required roof replacement.

This is different from every other roofing situation in real estate. This isn't negotiable. This isn't optional. This isn't "let's talk about a credit."

This is: The loan will not fund—and your sale will not close—unless this roof gets replaced. Period.

What Does "Subject To" Actually Mean?

When an appraisal comes back "subject to," it means the property is conditionally approved at a certain value, but the lender won't actually fund the loan until specific conditions are met.

You'll see language like this in the appraisal report:

"Property appraises at $385,000 subject to completion of roof replacement. Current roof covering has exceeded its useful life and shows significant deterioration. Photos and completion certificate from licensed contractor required before loan funding."

What this means in plain English: The appraiser has determined that the roof is in such poor condition that it represents a risk to the property's value and/or the homeowner's safety. The lender is saying: "We're not giving you money to buy a house with a failing roof."

Why Lenders Do This

Banks require that major systems meet minimum standards before they'll take on the risk. Here's their logic:

Bank loans you $350,000. Six months later, the roof fails. Water damage destroys the interior. You stop making payments because you can't afford both a mortgage and a $50,000 repair. The bank forecloses. Now the bank owns a destroyed house worth $250,000 instead of $385,000.

The bank loses money. That's why they require certain major systems to meet minimum standards before they'll take the risk.

Which Loan Types Are Most Strict About Roofs?

Not all loans are created equal when it comes to property condition requirements.

FHA Loans (Most Strict)

Requirements: Roof must be structurally sound, no missing shingles or damaged areas, gutters must be secure and functional, no water damage or leaks, must have at least 2-3 years of remaining useful life

Why so strict? FHA loans are government-backed and designed for first-time homebuyers. The government wants to ensure these buyers aren't purchasing homes that will immediately need expensive repairs. If your roof is 20+ years old, an FHA appraiser will likely require replacement even if it's not actively leaking.

VA Loans (Very Strict)

Requirements: Roof must be free of defects, must have remaining useful life (typically 2+ years minimum), all components must be in good working order, no evidence of leaks or damage

Why so strict? These loans are guaranteed by the Department of Veterans Affairs as a benefit to veterans. The VA wants to protect veterans from buying problem properties. VA appraisers take their job seriously.

Conventional Loans (Least Strict... Usually)

Requirements: More flexible, typically only flag serious issues, more likely to allow repairs instead of replacement

But here's the catch: Even conventional loans can require roof work if the roof is visibly deteriorating, there's evidence of leaks, the appraiser deems it a safety hazard, or it's affecting the property value.

The Timeline Crisis: Why This Is So Stressful

Let's map out what usually happens:

You now have 9 days to complete a job that realistically takes 14-18 days.

The Emergency Response Plan

You just got the news. Appraisal came back subject to roof replacement. Closing is in 2-3 weeks. What do you do RIGHT NOW?

Hour 1: Information Gathering

Get these documents immediately:

• 1. Full appraisal report - Not just the summary, the whole thing. Read the roof section carefully.
• 2. Photos from the appraisal - These will help contractors understand what's required.
• 3. Lender's exact requirements - Call directly and ask specific questions about what needs to be done.
• 4. Contract review - Who is responsible for this? What does your purchase agreement say?

Hour 2-4: Emergency Contractor Search

Call multiple roofing contractors and say this exact phrase:

"I have an emergency situation. We're under contract with closing in [X] days. The appraisal came back requiring roof replacement. I need someone who can inspect TODAY or tomorrow and provide an estimate within 24 hours. Can you help?"

Red flags to avoid: "We can start today!" (without even seeing it), prices way below everyone else, "We don't need permits" (if they're required), unlicensed/uninsured contractors

Day 1-2: Assessment and Estimates

The contractor needs to understand this is an appraisal-required replacement with tight timelines. Ask critical questions:

• • "If we approve this today, when can you start?"
• • "What's the material lead time? Can it be expedited?"
• • "How many days of actual installation?"
• • "What happens if it rains?"
• • "What documentation will you provide for the lender?"
• • "Have you done appraisal-required work before?"

Day 2-3: The Money Conversation

Scenario A: Seller Pays (Most Common) - The seller is trying to sell the house. If the roof prevents the sale, they don't get paid. Usually sellers bite the bullet.

Scenario B: Split the Cost - Sometimes parties negotiate, but only if the lender allows post-closing work, which most don't.

Scenario C: Buyer Backs Out - If the buyer can't afford it and seller refuses to pay, the deal might fall apart.

Day 3-5: Making the Decision

Choose a contractor. Sign the agreement. Pay the deposit. Order the materials.

Send an email to all parties:

"Update: Roof replacement is approved. [Contractor] has been hired. Materials ordered today, delivery [date]. Installation scheduled [dates]. Expected completion [date]. Requesting 5-day closing extension to [new date]."

Day 6-10: Material Wait Time

Materials aren't here yet. Use this time to coordinate re-inspection with the appraiser, notify lender of progress, extend closing formally, and pray for good weather.

Day 11-13: Installation

The work begins. Be available, take photos, communicate progress, and prepare for surprises (like discovered decking damage).

Day 14: Completion and Documentation

Get completion certificate, final invoice, warranty information, final photos, and permit sign-off if required.

Day 15: Re-Inspection

Appraiser returns, inspects new roof, takes photos, verifies work was completed per requirements, prepares updated report (1-3 business days).

Day 16-17: Lender Review

Underwriter reviews updated appraisal. If everything looks good, they issue Clear to Close.

Day 18+: Actually Closing

Finally. You can breathe.

Real Stories: When Appraisals Require Roof Work

Success Story: The Hernandez Home

Situation: FHA appraisal required full roof replacement. 23-year-old roof. Closing in 22 days.

Result: Sellers agreed to pay, we inspected Day 2, contract signed Day 3, materials delivered Day 7, installation Day 8-10, re-inspection Day 11, updated appraisal Day 12, closing extended 8 days, deal closed successfully.

Key to success: Everyone communicated clearly, moved fast, and worked together.

Disaster Story: The Miller Property

Situation: VA appraisal required roof replacement. 28-year-old roof. Closing in 21 days.

What went wrong: Sellers argued with the appraiser for 5 days, couldn't get contractor to commit to timeline, materials delayed, weather turned bad, buyers' rate lock expired, buyers got angry and demanded price reduction, sellers refused, deal fell apart.

Lesson: Delays compound. Every day of debate is a day lost from the installation timeline.

Horror Story: The Davis Drama

Situation: FHA appraisal required roof work. Sellers hired the cheapest contractor.

What went wrong: Contractor was unlicensed, did shoddy work, appraiser refused to approve, sellers had to pay twice to have it done correctly, closing delayed 3 weeks, buyers almost walked.

Lesson: Don't cheap out on appraisal-required work. Appraisers and lenders scrutinize everything.

Documentation Required for Lenders

When work is complete, have this ready BEFORE the appraiser returns:

• ✅ Completion certificate from contractor (on company letterhead)
• ✅ Final paid invoice (proof of payment)
• ✅ Before and after photos
• ✅ Warranty documentation including transferability
• ✅ Proof of contractor licensing and insurance
• ✅ Permit documentation and sign-offs
• ✅ Updated appraisal photos from re-inspection

How to Prevent This Nightmare

For Sellers: If you know your roof is old, replace it before listing. Proactive roof replacement will save you so much stress. (See Blog Post #1)

For Buyers: If you're using FHA or VA loans and the home has an older roof, ask about it during the inspection period. Don't wait for the appraisal surprise.

For Agents: Set expectations early. If you're listing a home with a 20+ year old roof and buyers will likely use FHA/VA, warn the sellers this might come up.

The Bottom Line: How to Survive

DO: Act immediately, communicate clearly, hire reputable contractors, be prepared to extend closing, document everything, stay solution-focused, follow lender requirements exactly, build in buffer time for weather

DON'T: Argue with the appraiser, cut corners with cheap contractors, assume repairs will work when they say "replacement," underestimate the timeline, forget to communicate with lender, skip required permits, panic (okay, panic a little, then take action)

Final Thoughts

The appraisal-required roof replacement is the most stressful roofing scenario in real estate. But it's survivable. Most of these deals do close.

It requires fast action, clear communication, reasonable expectations, professional help, and maybe some antacids.

If you're in this situation right now, take a deep breath. You're not the first person this has happened to. With the right approach, you'll get through it.