On Tue, 25 May 2021 17:14:24 -0700 (PDT), DerbyDad03
wrote:

On Tuesday, May 25, 2021 at 6:56:26 PM UTC-4, micky wrote:
A friend of mine bought a house in Baltimore County 5 or 10 years ago
that still had knob and tube wiring, at least in the attic. My friend
says you can't get a mortgage if you don't pass inspectinon and you
can't pass inspection with k&t wiring.

What do you think happened?

Inspected or appraised?

You can't get a mortgage without an appraisal. Lenders perform an
appraisal to make sure that the house is worth at least what the
borrower is asking for. They need to make sure that they can sell the
property and get back what they lent if the borrower defaults.

Up here an electrical condition inspection is required - aluminum
wirin can pas but it's been a long time since K&T stood a chance.
(possibly on an un-molested historic house - but not likely

An inspection is typically for the homeowner's benefit so they know what
they are getting into. (NPI) It can also be used a negotiation tool to get the
seller to lower the price, give some money back at closing or perform a
needed repair before closing. And don't let the current practice of submitting
an offer without a inspection contingency fool you. The buyer can still play
the inspection card after the offer is accepted. It's up to the seller to agree
or not, but if (s)he doesn't agree and the buyer walks, the seller has to go
through the trouble of putting the house back on the market.

Electrical Safety Authority inspection required by insurance company
and occaisionally the bank

However, an FHA mortgage is a little different. While they don't require
that the *buyer* get an inspection done, their appraisal process includes
evaluating the condition of the house and they can require that repairs
be made before they will sign off on the mortgage. In the end, the buyer
pays for the inspection when they pay for the FHA appraisal.

K&T wiring will pass an FHA inspection as long as the system is deemed to
safe and the electrical system meets the other criteria of an FHA loan.