Today, I had two different people ask some very good questions regarding FHA financing that I thought I’d share. Read on…
Q. Is there no way to buy with less that 10% down? I keep getting passed over by someone with more cash!
A. Don’t give up just use another tactic. Typically properties that have just hit the market are the hottest so why not take a look at the one’s that have been on the market longer? Those properties would be more negotiable and can be an opportunity for you.
So putting down less than 10% would no longer be as big of an issue and you can even go with the minimum FHA down payment of 3.5%
Bottom line avoid the turn key properties and look for that diamond in the rough.
Q. What does it mean when a home is not qualified for FHA financing? I am approved for a FHA loan. Some of the homes that I have been interested in will not accept FHA financing.
A. There can be two reasons why a property doesn’t “qualify” for FHA financing.
1) the Seller is just looking for Buyers who can put down a larger down payment and figures a Conventional loan would close faster and easier or
2) the Seller is under the impression that the property won’t qualify for a standard FHA loan due to deferred maintenance that they aren’t willing to fix
If it’s reason (1) then there’s not much you can do until the property sits on the market for awhile and the Seller has a change of heart. But if it’s reason (2) then you and those who represent you need to explain to the Seller that you plan to use the FHA 203k and not a standard FHA 203B loan.
With the FHA 203K you no longer have the problem of the property not qualifying. And now the Seller doesn’t have to make those repairs they were concerned about.
Until next time
Marvin
“Your 203K Mortgage Lender”
www.203kMortgageLender.com
 Find a 203k Lender at the 203k Mortgage Lender Directory |
Related posts:
Linda Asked:
We would like to purchase a mixed-use building and finance it with an FHA loan (not necessarily a 203k). Mortgage brokers have been telling me that FHA will not finance a mixed use building and that I would need 25% down, and saying it would require a commercial loan. What is the real story? Can I get an FHA loan for a mixed use property? Is this a losing battle?
Thanks for any info -
203K Mortgage Lender’s Answer:
On 203k’s, FHA will look at mixed use residential properties, HOWEVER the ratio of residential to mixed use varies from a maximum of 25% to 49% (depending on the number of floors and layout of the structure) Also, “No” 203(k) funds can be used to improve the commercial portions of the property. If you can’t get the loan done as a standard FHA 203b then your only choice would be the FHA 203k option which is one of the benefits of using a 203k Specialist because they can do both the FHA 203k & 203b.
Best of luck on your mixed-use purchase.
203K Mortgage Lender
We would like to purchase a mixed-use building and finance it with an FHA loan (not necessarily a 203k). Mortgage brokers have been telling me that FHA will not finance a mixed use building and that I would need 25% down, and saying it would require a commercial loan. What is the real story? Can I get an FHA loan for a mixed use property? Is this a losing battle?
Thanks for any info -
Sheri Asked:
we are looking at purchasing a home that is not finished. The partially built home (foundation, roof, doors & windows) was left when the GC went bankrupt. Can we use a 203K loan to buy and finish the home? Also my husband is a contractor can he do the work?
Thank you
203K Mortgage Lender’s Answer:
Hi Sheri,
As far as your husband being a licenced contractor and doing the work himself that is allowed.
Properties that are either abandoned or left unfinished by contractors or homeowners are eligible but only if the property has already in existance for one year. In other words, no New Constructions and it has to be a property that has already been issued a Certificate of Occupancy from a local agency – a minimum of 12 months back. If in your situation , the property doesn’t qualify for the FHA 203k loan then ther e might be a lender on the 203K Mortgage Lender website that could possibly still help, so let us know and good luck.
203K Mortgage Lender
we are looking at purchasing a home that is not finished. The partially built home (foundation, roof, doors & windows) was left when the GC went bankrupt. Can we use a 203K loan to buy and finish the home? Also my husband is a contractor can he do the work?
Thank you