Question Details

Deelaina, Home Buyer in Farmington Hills, MI

Private Lender Needed. I am looking to buy a 30k foreclosed condo in Michigan. My credit score is in the low 600s. I have already been preapproved

Asked by Deelaina, Farmington Hills, MI Tue Jul 13, 2010

for a FHA loan however, I was told that the minimum loan amount for FHA is 45k. How do I find private lenders?

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2
HI Deelaina

Rudy's right - while many programs have no minimum loan size lenders often do not accept loans below a certain threshold. Ironically this has more to do with government regulation than anything else. We are prohibited from doing "high cost" loans where fees exceed a certain percentage of the loan's value. In your case, we could not recover expenses beyond the cost of the appraisal and a few other items - in other words, we would be taking a loss since we can't pass on all the normal charges to you. Despite the law's good intentions, it hurts many of those it was designed to protect.

You can always try to obtain an unsecured loan with a local bank. If you do that just be certain to have an excellent real estate attorney representing you when you purchase.

Best wishes! I hope you get your home!

Tom
0 votes Thank Flag Link Wed Jul 14, 2010
Hi, Deelaina

For the record: FHA does not have a min loan requirement. That's a lender criteria. We ourselves look at low loans amount on a case by case basis, but I know that a loan of this size would be next to impossible to do. I also don't know any lenders that are doing anything that low as well. Sorry.
0 votes Thank Flag Link Wed Jul 14, 2010
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