Home Buying in Michigan>Question Details

Christie, Home Buyer in 48135

Fanny Mae home approved for Renovation Mortgage only. Will an FHA work?

Asked by Christie, 48135 Mon Apr 9, 2012

I have been preapproved for an FHA loan. I have seen Fanny Mae homes that I'm interested in but they are only approved for Homepath Renovation financing as opposed to the regular Homepath mortgage. I know that I can use FHA financing on a Fanny Mae property but I also know how "picky" FHA is in regard to the condition of the home. I am wondering if a house listed as "Homepath Renovation" only will have so much work to be done that I wouldn't be able to get it with a regular FHA loan. Does anyone have any insight on this?

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If you are appoved for an FHA loan I would discuss with your lender an FHA 203k loan. This loan allows you to finance your repair costs.
0 votes Thank Flag Link Tue Apr 10, 2012
Christie,

Just because the remarks say Fanny Mae Homepath Renovation does not mean you have to use that loan. You can still use your FHA loan. Many of these home will pass FHA appraisal. You will need to go look at these homes with your agent to see there true condition. However, I would check into the Home Path mortgage because there are some advantages over FHA and you should also be able to qualify for the Home Path. If your lender does not handle this typ of loan find one that does.
0 votes Thank Flag Link Mon Apr 9, 2012
I do have a lender who handles Homepath mortgages so that could work. My only concern with a HP Renovation (or even an FHA 203K mortgage) is that my husband is a general contractor. Any work we want to do he can easily do and for much cheaper that hiring someone else. My understanding is with these renovation type loans you cannot do the work yourself. Is that true? Also, aren't they more of a pain to get/close on in general?
Flag Mon Apr 9, 2012
What you need is an FHA 203K renovation loan. Basically, the FHA will do an appraisal and determine the value of the home AFTER you do the renovations. They will help you estimate the cost of the renovations, then combine that with the purchase price of the home so that you have the funds to do the repairs. They will then work closely with the contractor you choose to get the renovations done within the next 6 months so that you can move into your new home. It's a terriic product and a great way to get into the home you want at a price you can afford if you are willing to do a little work and build some 'sweat equity' in the process. Go to http://www.rebuildusa.com to find resources for loan officers, realtors, home inspectors and even contractors to help you with the process.
0 votes Thank Flag Link Mon Apr 9, 2012
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