Good luck with your search.
Millie C Lumpkin, SFR
Phone: (312) 217-5644
As a REALTORÂ® who formerly worked in Madisonville and still serves that market area, I am familiar with the type and price of homes for sale. I am not familiar with the property in question or any of the finer details of this prospective purchase, but based upon the information you have provided, I would offer the following thoughts:
A traditional FHA Section 203(b) home loan - which you are likely seeking to obtain for your purchase (correct me if I'm wrong!) - is intended for Buyers who will be purchasing a home in move-in ready condition. Because FHA will be insuring the home loan for the benefit of the lender, FHA wants to be certain that the property is not in a state of disrepair or poor condition that would detract from the home's marketability and value in a future foreclosure sale. When you find a property you wish to buy and enter the purchase process, the FHA-certified property appraiser and loan underwriter will note if there are any repairs that need to be completed in order for the property to be approved under FHA 203(b) loan guidelines. These repairs must be completed before the day of closing.
In a foreclosure situation, the bank or other entity that owns the foreclosed property will generally, a) NOT agree to repair any property defects, and b) NOT permit the Buyer to perform any repairs before closing.
The listing agent may be describing this scenario: The property has serious defects that FHA 203(b) loan guidelines require to be repaired before closing. The owner of the foreclosed property won't repair these problems or permit you to do so; thus, it can be presumed that your loan underwriter won't approve the home for purchase.
â€¢ Make sure you have a REALTORÂ® representing you and working on your behalf to guide you through this purchase process. He or she needs to be familiar with foreclosures and the FHA loan programs in order to help keep you informed and give you the best shot at success with your purchase.
â€¢ With the help of your agent, make a list of any items in disrepair or home defects that you or the seller's agent are aware of. Share this list with your loan professional.
â€¢ Discuss this matter with your loan professional and seek their thoughts. Ask them, Am I using the right loan program to buy this home in its current condition?
â€¢ Ask your loan professional about the FHA Section 203(k) Rehabilitation loan program that can help a qualified buyer purchase a home that is in need of serious repair work. 203(k) loans can include financing for necessary repairs that will be completed by an approved contractor after closing.
Without knowing the particulars of this situation and home, and without representing you as your agent, I can't provide you more specific counsel than this. I hope this information will help you as you seek to achieve your real estate goals! Contact me if I can be of further assistance.
David Companik, REALTORÂ®
Keller Williams Realty - The Woodlands
However, if the situation is more severe than that, ask about doing a Homepath Renovation Loan. Fannie Mae will allow you to get bids for your desired repairs and add them along with the sales price to determine the total loan amount. It's more complicated, to be sure, but it can be done. We can do up to a 97% loan on the total, but there would be a higher rate with that credit score.
Finally see if the house is regular Homepath eligible. Then Fannie doesn't require an appraisal or PMI. It will close quickly, and you can make repairs later.
We need to get you in touch with a great realtor who can show you homes that might qualify for FHA financing. Not every home will. It can be common that some or many foreclosures might not qualify.
FHA wants to help insure you get a good and livable home, not one that needs work or has problems.
None of this is 100% guarantee, but just guidelines to help you down the right path.
Keep after it, sounds like you are on the right track.