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Unpermitted Space is OK – No Value; No Health and Safety Issues

One of our Realtors asked us about a house in Oakland with 1,800 square feet and 4 bedrooms and 2 baths (per MLS). The problem is that the county records indicate that the house has 1,100 square feet with 3 bedrooms and 1 bath.

The house’s lower unit (1 bedroom and 1 bath) was built without permits.

We can finance this house as long as the lower unit was built in a “workmanlike manner” with no health and safety issues.

We cannot, however, give significant value to the un-permitted space; the appraiser will have to use 1,100 square foot comps, making the appraisal very difficult if the purchase price is indicative of an 1,800 square foot house.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646