diff --git a/lib/ansible/utils/template.py b/lib/ansible/utils/template.py
index f7b0931d3e..78b6487642 100644
--- a/lib/ansible/utils/template.py
+++ b/lib/ansible/utils/template.py
@@ -183,6 +183,10 @@ def _legacy_varFind(basedir, text, vars, lookup_fatal, depth, expand_lists):
             args = args.strip()
         # args have to be templated
         args = legacy_varReplace(basedir, args, vars, lookup_fatal, depth + 1, True)
+        if isinstance(args, basestring) and args.find('$') != -1:
+           # unable to evaluate something like $FILE($item) at this point, try to evaluate later
+           return None
+
 
         instance = utils.plugins.lookup_loader.get(lookup_plugin_name.lower(), basedir=basedir)
         if instance is not None: