FHA rules (refunds due to non-compliance)

[mauikart]

What is the name of your state? Nevada

HELP, I am trying to get all my earnest moneys back from a property I was going FHA loan on that failed FHA inspection/certification. I am told I can get ALL money I put up for escrow and any other that I incvested to aquire the property. Does anyone know the actual policy/regulation number from FHA?
I am correct?

Ken
Fernley Nevada
[email]mauikart@sbcglobal.net[/email]

[HUD-1]

FHA does not inspect/certify properties. A lender will have the property appraised by an FHA approved lender. Below is info on the Amendatory Clause. Was your contract conditioned upon loan approval and/or a home inspection? Did you receive a refund of your earnest money deposit?

Section 226 of the National Housing Act requires that the
purchaser of property be provided a written statement of the
appraised value of the property. The statement must be provided
before the sale of the property. As this requires an appraisal
at a time out of the normal sequence of the mortgage origination
process, HUD has implemented Section 226 by permitting the buyer
and seller to sign a sales contract before the statement of
appraised value is delivered if the contract contains, or is
later amended to contain, a provision permitting the purchaser to
escape the purchase obligation without loss if the appraised
value is less than the contract sales price. This provision is
generally implemented using the FHA "amendatory clause".

[mauikart]

The FHA loan was denied due to it failed the elevation certificate (home is next to a lake and in a flood plane). It is not a HUD home. We were FHA so we didn't have to put 20% down. Anyway, all the lenders rejected the property when it went for FHA aproval (failed elevation certificate) due to the home now being "non-calateral".
Went it fell out after a couple of differnet tries, the owner held on to a $7500 earnest money out of escrow and never returned it. I have given them 6 months now to return it with no luck**************legal action is next. I was told by a couple of the lenders that turned it down that FHA states if the property fails to meet the requirement, the buyers are entitled to all money invested refunded.
Thanks for the help

[Gadfly]

Where is your agent in all this?