Financing in New Port Richey>Question Details

Swatj15, Home Buyer in New Port Richey, FL

Would FHA approve a home that has no light fixtures and needs most of the kitchen cabinets?

Asked by Swatj15, New Port Richey, FL Tue Jul 21, 2009

I have been preapproved for an FHA loan and have found a foreclosed home that I love. The home has no light fixtures and is missing most of the cabinets in the kitchen but thats it. Would FHA approve this home for a loan? And if they wont approve the home could there be a stipulation where if I get these items fixed, out of pocket, then they would approve the home. Or is my best bet just to try to go with the 203K FHA loan?

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Hi Swatj15,

Yes- FHA will approve a loan for this home if you get a 203K rehab loan. Based on the items missing, and hopefully, if there are no structural repairs needed, you may want to to consider a 203K streamline loan. The 203K streamline is the "mini" 203K product that can be used for minor renovations, appliance purchases and minor repairs. The cost of repairs cannot exceed $35,000. The cost of the repairs and your first mortgage will be combined into one monthly payment. The mortgage can be fixed or adjustable.

The repairs should be completed within 90 days of closing. 50% of the cost will be disbursed at closing with the balance paid to the contractor upon completion. You can use a national retailer for the cabinets and installation but since you have other items, I would interview a few general contractors or subcontractor/handyman to get an idea of how much they will charge to install the cabinets, light fixtures and other miscellaneous items that may be listed on the home inspection. Or you can you use both a national retailer for the cabinets and installation and then use a subcontractor or GC to take care of the other miscellaneous items.

I strongly suggest you use an FHA consultant for your home inspection. The consultant will prepare a plan and assign a value to the cost of the repairs. You can use this report as a basis for obtaining estimates from the GC or contractor.

The rates are very competitive. Some lenders offer the same rates regardless of whether your getting a regular FHA purchase or 203K rehab loan.

I'm currently working on several rehab loans and have closed several.

Please feel free to contact me if you have any questions regarding this program.

Sincerely,
JACQUELINE CLARKE
Enterprise Mortgage Group
Winter Park, FL
Cell: 407-739-3853
Email: jclarke@enterprisemortgagegroup.com
0 votes Thank Flag Link Wed Jul 22, 2009
Because you don't own the home as yet, I doubt that the current owner will allow you to perform the needed repairs. FHA 203 K would be my recommendation as FHA will not approve the home as is.

Please contact me for information regarding FHA 203 K mortgage programs.

John Walsh
Sr. Loan Consultant
Florida Mortgage Corporation
Clearwater, FL
(727) 791-8800
floridamortgagejw@ij.net
0 votes Thank Flag Link Wed Jul 22, 2009
Swatj15,
FHA requires the home be "livable". Kitchen cabinets, stove, sinks, toilets, hot and cold running water, etc. Weve had customers who did both. If they really love the house, they pay for minor repairs out of pocket. Others will opt for the 203K loan, which is simply a Fannie Mae loan that allows for repairs to built into the loan. Also referred to as "repair escrow". All lenders CAN do this loan, but choose not to because their are limits to what the lender can charge. The list below Mr Griffin refers to, is a list of lenders that have done a 203K loan in the past 12 months. My advice is right after you have a fully executed contract, get a state certified FHA appraiser inspect the prospective home to determine if it will pass or not.

Feel free to call me if you have any more questions.

Frank Olguin
Mortgage Banker
AmericaHomeKey Inc.
500 W. Cypress Creek Rd, Suite 330
Fort Lauderdale, FL. 33309
Folguin@americahomekey.com
Hablo Espanol
office 954-771-7715 x104
cell 561-386-9731
pfax 954-379-4469
Florida Mortgage Lender
No. ML0700325
0 votes Thank Flag Link Tue Jul 21, 2009
If you want this particular house, you will probably have to go with an FHA 203K Loan.

Here is the page from HUD / FHA:

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm?〈=en

This Page contains additional information:

http://www.hud.gov/offices/hsg/sfh/203k/203kmenu.cfm

An approved Lenders List (subject to change):
be sure to check the 203K Box at the Bottom of the Page:

http://www.hud.gov/ll/code/llslcrit.cfm


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Best wishes to you,
Fred
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0 votes Thank Flag Link Tue Jul 21, 2009
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