Jay:

Check with your local smaller banks that will offer portfolio products. (this means they loan their own money-and hold onto mortgages, therefore they do not have to conform to Freddie standards or FHA guidelines) You may qualify for zero down financing and the furnace should not be an issue because it is conventional financing.

As an example, Key Bank in my area offers the KeyCommunity Mortgage with no downpayment, no pmi. 3% seller contribution allowed toward closing costs or prepaid items/escrows. There are income limitations on this loan.

Jay,
You are 100% correct, a home without a furnace in Painesville is not habitable. FHA will only make standard loans on homes that are habitable.
If you have been approved for an FHA loan, getting a 203-K should not be a huge challenge.
There are a number of ways to work around this.
Not all lenders who do FHA loans do FHA-203K loans.
If you are not currently working with a Realtor as YOUR Buyers agent, please give me a call at 440-487-2193 or drop me an e-mail at jwirsing@kw.com and we can explore some ways to getting this done.

Jay-

Have you thought of an escrow holdback? Some lenders (mine being one) will let there be a set aside amount of funds (approx 150% of the repair cost) set aside by either seller or buyer that can be allocated to the repairs/installation of a furnace after the home is closed on.

An escrow holdback is usually up to the specific lender but that may be an option whereby you will not need a 203k loan.

Let me know if you have any questions.
Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com

Apply Online: flagstarloans.com/lallison

sorry coudltn find a button to allow me to edit or answer. But I did ask her about a fha 203k a month ago and she said that it would require 2 apprasials and that they may not approve it because I have no tradiitonal credit established. Is this true? Because this will be the the 2nd apprasial I would have paid for on a house since August. The first one was nice andupdated and needed no work but they didnt want to sign off on it unless the seller would go under $7000k of the asking price because of all the foreclosures going on so that is why I decided to look at single family homes instead of condos.

TJ is dead on. A FHA 203k loan will fit your needs.

I am a mortgage broker. If I can be of service, please let me know!

Martin Smith

Precision Funding
877-238-6324 Ext 704
513-536-7184
877-238-6324 FAX
MSmith@PrecisionFundingUSA.com
http://www.PrecisionFundingUSA.com

Jay your lender must not be hip to reo's,there is a 203k fha,you get a certified quote etc.Countrywide is real fimiliar with this process,I just went through,with my buyer,so you may check with in your area,we were with 7 diff lenders,before,they did not know the process.good luck,you should be fine,

TJ

I would locate a home which fits within your lender specifications and deal with the problems. YES heart breaking however IF YOU REPAIR the home any damage from a contractor YOU CAN BE SUED. More than likely home would be sold to a cash buyer than lender.