Is your remodel permitted? Do you plan to refinance?

I heard something interesting from an appraiser this morning:

-the secondary loan market (primarily Fannie Mae and Freddie Mac) are increasingly investigating proof of permitting for refinances on remodeled homes, which means that appraisers report when they find them and when they don’t.

-their concern is insurance. They fear that if a catastrophic problem is caused by an un-permitted action, they borrower’s insurer may not pay, leaving the debt holder in a compromised position.

-if you have any unpermitted work in your home and want to reconcile this, some municipalities will issue permits ex post facto. Of course, be cognizant when inviting permitting authorities into your property.