This post will be interesting to people buying a home, Realtors, appraisers, and most anyone involved in the real estate process.

I recently had a loan get rejected, which I am currently working to get approved. The loan was rejected due to “an unacceptable property”. Upon further questioning, the bank told me this was due to “functional obsolescence”.

The Fannie Mae Seller/Services Guide says, “Functional depreciation (which is traditionally referred to as functional obsolescence) is a loss in value that is caused by defects in the design of the structure—for example, inadequacies in such items as architecture, floor plan, or sizes and types of rooms. It also can be caused by changes in market preferences that result in some aspect of the improvements being considered obsolete by current standards—for example, the location of a bedroom on a level with no bathroom, or access to one bedroom only through another bedroom. Read the rest of this entry »