Home Buying in 33180>Question Details

Stas Kolbin, Real Estate Pro in Sunny Isles Beach, FL

How likely REO property offer to be accepted with an FHA (3% down)?

Asked by Stas Kolbin, Sunny Isles Beach, FL Tue Jun 25, 2013

Offer at listing price.

Help the community by answering this question:


Hello Stas, Anna, Christina, Kim, Samantha and Maria,

I am extremely familiar with renovation loans, I am a Renovation Loan Specialist with Wells Fargo Home Mortgage. The Nations leading renovation loan lender (where the loan officer's doing reno loans are required to specialize).... ok enough selling...on to answer...

The answer is multifaceted as your question.

FNMA properties must be double checked on HomePath.com to "see" the actual financing options available (look at the icons carefully), not ALL of FNMA properties are eligible for HomePath (regular) financing (which I do), but may offer HomePath renovation financing (which really suggests that there are certain issues that FNMA is aware of that will generally prohibit financing in general and they are not fixing it... AND is not exclusive to "just" HomePath Renovation, but ANY Renovation Loan options (FHA 203(k) (Streamline or Full) AND Conventional Renovation Loan Financing (also referred to as "HomeStyle") - And these Renovation Loans I also do...day in day out...

Using the renovation loan program correctly, the code violation can also be cured. This can be tricky, with open code violation there is generally an amount of money owed to the municipality as well...which cannot generally be mitigated unitl after the violation has been brought into compliance. WHO will be resposible to pay that? The seller? The buyer?

At the end of the day the seller is looking at the merits of the offer itself, not the type of financing. It is highly beneficial to have the loan officer communicate with the listing agent if you are planning on doing any kind of renovation loan, especially an FHA 203(k), this way the listing agent can be confident that you are (hopefully) working with a Renovation Loan Specialist that is providing your buyer with a Priority Buyer Letter showing that they have been thouroughly vetted and Preapproved for a Renovation Loan. by a Renovation Loan Specialist.

I would love to discuss this further with each of you!

Give me a call!

Dennis J Hearing
Renovation Loan Specialist
Wells Fargo Home Mortgage

Cell: 954-648-4949
0 votes Thank Flag Link Sat Jun 29, 2013
Mr. Kolbin,
You could either apply for an FHA loan with 3.5% down or you may also check to see if this property is approved for HomePath loan renovation program offered usually when the property is a Fannie Mae Reo. If the property is a Fannie Mae REO and offeres the Homepath, then you're looking to come in with as little as 3% D/P, no appraisal is necessary and you may be eligible to obtain up to $35,000.00 towards renovation cost. I highly suggest you consult with a lending institution of your choice for further information. Should you need any further help, please do not hesitate to contact me.
Best of luck.
Cristina G. Diez
Century 21 Premier Elite
Miami, Fl.
1 vote Thank Flag Link Wed Jun 26, 2013
I'd like to add that 'maybe' the HomePath Renovation mortgage may be a good fit for you, as well. Did you check it out?
1 vote Thank Flag Link Wed Jun 26, 2013
You can do a FHA 3.5% down along with a FHA 203k rehab loan to cover any repairs or upgrades up to $35,000. That way you can get the FHA loan. It's best to have a loan officer who is 'very' familiar and skilled with these loans as it will require a few bids so you know what to ask for on the 203k rehab loan. Do not do this with a loan officer that has not done these type of loans, you'll regret it. The ones that have make it go so smoothly.

This way you can just make an offer as an FHA sale and sign the code violation releases.

You'll get part of the money upfront at closing for the work to be done and when completed you'll fill out forms to get the rest of the money for your contractor.

The final FHA loan for you will be just one loan with one payment.

If you like this answer or if it was useful to you, a quick click on the green 'thumbs up' would be appreciated.

Kim Eisen
"Helping People Make Smart Real Estate Decisions since 1980"
(651) 457-HOME (4663)

1 vote Thank Flag Link Wed Jun 26, 2013
In purchasing Reo Properties . It really depends on the condition of the property . You local mortage broker/ Banker would be able to help give you better information if a particular property is able to meet the Fha Guidelines for Reo properties .

If you have any other questions about buying Reo/ Bank Owned Properties I am happy to help .

Samantha Tenzer Friedman
Tenzer Realty Inc
Cell 786-314-6100
Email: SamanthaTenzer@yahoo.com
Website http://www.tenzersellshomes.com
1 vote Thank Flag Link Wed Jun 26, 2013
It all depends on the condition of the property. If the property condition will pass FHA guidelines, then it should not be a problem.
1 vote Thank Flag Link Wed Jun 26, 2013
Stas, if you are still lookin for info on the FHA program. I would be happy to help you. I work in the area and would be happy to sit down with you one on one and answer all of your questions.
0 votes Thank Flag Link Wed Jul 3, 2013
Its possible if home has received lower offers than your FHA offer.
0 votes Thank Flag Link Thu Jun 27, 2013
Will it be possible to utilize Homepath Renovation Mortgage Financing towards appliances?
0 votes Thank Flag Link Wed Jun 26, 2013
You may try, but if the "seller" is selling the property without any appliances (As Is) chances are you might have to purchase them yourself. :(
0 votes Thank Flag Link Wed Jun 26, 2013
Thank you Kim, thank you Cristina!
Property is being sold AS IS. There is no single appliance. Is submitting the offer with asking for a Buyer's credit a good idea? ( Fannie Mae REO)
0 votes Thank Flag Link Wed Jun 26, 2013
Thank you Maria, thank you Samantha!

Property is being sold AS IS. Can you elaborate on the the statement: This property is ONLY approved for Homepath Renovation Mortgage Financing. Buyer must sign hold harmless due to code violation.
0 votes Thank Flag Link Wed Jun 26, 2013
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