Financing in Pinellas Park>Question Details

gowreck, Home Buyer in Pinellas Park, FL

Is it possible to get financing on short sale house that has water damage?

Asked by gowreck, Pinellas Park, FL Wed Mar 3, 2010

The house has some dry rot around a door and obvious mold in the detached garage. The one bank I talked to immediately cut any more discussion off when I mentioned this, saying they would only give financing for houses in pristine condition -- which seems to remove a short sale. Curious how to handle this.

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8
Sheri Ray’s answer
Possibly you could look in to getting a 203k loan through Wells Fargo-the 203k allows for an escrow
account to be set up and certain repairs to be made. There are certain guidelines to meet to qualify for
this loan but it may work for your situation.

Sheri Ray
Web Reference: http://www.sheriray.com
1 vote Thank Flag Link Wed Mar 3, 2010
Mr. Lerette will be your best option. I can do 203K loans also, but with this program, it's best to use a local person. There are 2 types of 203K loans: Streamline and regular (for lack of better words). The Streamline does not allow structural repairs whereas the regular does. Streamline is restricted to $35K or 110% of the after repair value, whichever is less. The regular is unlimited not to exceed the FHA loan limit for your county. To make Mr. Lerette's life easier, find a HUD approved contractor to give you a list of repairs needed for the house, the dimensions, number of items, price etc. The contractor will need to provide a resume, references, insurance, bond and license. The appraisal will need to show "subject to repair" with an estimate of the house after repairs. You can get new appliances, new floors, new roof, new everything. It's a great FHA product. Rate's a little higher than normal. Good Luck
0 votes Thank Flag Link Fri Mar 5, 2010
I know a local morgage broker here in FL that is doing the loan program and can either assist you or refer you to someone locally that can! His name is Royce Ingram, you can reach him at
Royce Ingram; Direct line: 850.207.2775
Your Loan Officer
National City Mortgage, a division of National City Bank
4300 Bayou Blvd.
Pensacola, FL 32503
fax: 850.471.0618
e-fax: 1.888.476.7944
e-mail: royce.ingram@ncmc.com
apply on-line for your mortgage: http://www.ncmc.com/royceingram


I also know wells fargo does these type of loans! Check into it!

Good luck with everything!
0 votes Thank Flag Link Thu Mar 4, 2010
Just to weigh in on something outside of financing, specifically--I think a 203K loan would be a great idea, unfortuately I don't know of anyone who is doing them, but I did want to mention that it is far from the truth to say that all short sales are not going ot be in pristine condition--some of them have been very well cared for and maintained, and the sellers simply can't afford the payments any more.

I have had several of my short sale listings quilify for FHA mortgages, which are the hardest to qualify for in terms of condition.

Now, if you're talking foreclosed properties--those are the ones to look out for, since the banks take no responsibility for condition or disclosure on anything.

Good luck!
0 votes Thank Flag Link Thu Mar 4, 2010
Hello gowreck,

A home with water damage depending on it's severity does not necessarily disqualify it from financing. Although, the previous answer of obtaining FHA's 203k financing is probably in your best interest. Anything that is wrong with the property can be fixed through the construction part of the financing. You ARE still able to complete the work yourself if you can prove that you have the ability to do so. We offer FHA 203k financing and I'd be happy to assist you with any other questions you may have. Feel free to contact me at any time.

Joshua Lerette - The Tampa Bay Mortgage Pro
Innovative Mortgage
727-488-7355
Josh@TheTBMortgagePro.com
0 votes Thank Flag Link Wed Mar 3, 2010
Excellent, great information. I've reviewed the HUD page in regards to this and it seems like something I'd like to get moving on. Is this something I should approach a Realtor on?
0 votes Thank Flag Link Wed Mar 3, 2010
The FHA 203 K loan is a great idea! And probably the only possibility if you are getting FHA or other government backed loan that will require a strict appraisal and must be free of wood rot, mold, roof problems, etc. They dont typically care much about cosmetics- as a comsetically outdated house is different than a missing a/c, roof leak, electrical issues, etc. Most short sales and foreclosures will need some work, and that does count out financing sometimes, but depends on the type of repair necessary. It must have all mechanical parts of the house (heating, coolng, plumbing, electrical) and must have flooring (even if its ugly) in tact, etc.

This is the best website about the FHA 203 K loan and all the requirements!
http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

You can also buy a foreclosure or other property with this fiancing, and still only requires the 3.5% down payment.

Effectively, you will finance the cost of repairs into the purchase. From what I understand, the mortgage company does a few inspections to check that work was done correctly,but I did hear that you can't do the work yourself- you must hire contractors or have the mortgage company cut the check to the store. You can even purchase appliances with this, aswell as other repars. This is great for those who dont want to worry about repars or have the money for them!
0 votes Thank Flag Link Wed Mar 3, 2010
Any home you need financing to purchase will need to be in livable condition with no apparent health and safety issues. When the home is appraised any serious problems will be listed on the appraisal and the lender will require correction or additional inspections before a loan can be completed. Water damage and mold will be a big red flag. If you continue your search for a home in better condition not every short sale is in need of repairs. Keep looking or build the cost of repairs into your offer to purchase.
0 votes Thank Flag Link Wed Mar 3, 2010
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