Home Buying in Southington>Question Details

Sheila, Home Seller in Southington, CT

I am selling a 1/2 duplex. I have an interested buyer but he claims that he cant get approved for an FHA loan

Asked by Sheila, Southington, CT Sat Jun 28, 2008

becasue the dwelling is condo but less than 4 attached units- is this correct?
When we bought it 6 years ago- we used FHA and obvioulsy- since we are here- had no issues. Does our interested buyer have alterative options to get a loan to buy our place? Whats going on?
Thanks

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Your buyer is facing changes in the FHA guidelines which makes it much more difficult to approve certain properties. Best solution is for you, as the seller, to contact a lender that works with FHA lmortgage lending. You will then understand what is needed for your property to comply. I recently sold 4 (1/2) duplexes. One buyer was 5% down. They were able to obtain financing. You might consider doing a seller concession helping the buyer with closing costs which will then enable them to have the 5% down needed for conventional financing. This works if your buyers have strong credit. If their credit is in the low 600's you might be out of luck. Best to check with a lender yourself and not leave it up to the buyer.
1 vote Thank Flag Link Thu Jul 22, 2010
Is this a condo or a duplex. The answer is different for each. If it's a condo then it must have an association, rules and regulation, a budget, insurance on the exterior of the building and for common elements. If there are only 2 units in the building chances are those documents are missing and the property cannot be financed using FHA funding. Give me a call If I can help?
Web Reference: http://www.LeanderHomes.com
1 vote Thank Flag Link Sat Jun 28, 2008
Hello Sheila, you should ask your lender, but if both units were sold together (duplex) and not individual you may go FHA, but not as one single unit.
0 votes Thank Flag Link Wed Sep 8, 2010
He is correct, HUD will not approve a condo complex with less than 4 units.

To check see if a condo complex is HUD approved for FHA loans you can use this tool to search the HUD database https://entp.hud.gov/idapp/html/condlook.cfm

To learn more about the HUD FHA condo approval process check out this article http://marivicrealty.blogspot.com/2009/07/hud-fha-condominiu…
0 votes Thank Flag Link Tue Jul 14, 2009
What hasn't been addressed is rent to own ratio. If there are mre renters than owners in these duplexes, they cannot be aproved by either FHA or CHFA.
0 votes Thank Flag Link Tue Jul 14, 2009
I would have him contact a mortgage broker which should give him all options. I would love to assist you but you are currently working with an agent. Take care.
0 votes Thank Flag Link Sun Jun 29, 2008
This isnt a case of cold feet- he hasnt even put a bid on it- and hasnt yet because of the financing issue- so its not his way out- its preventing him from getting in- I guess he was interested in he property down the street and found this issue- so is trying to figure it out so he fan move forward with a possibel bid on our place.
we are not fsbo- and have an agent- I am pretty sure he called otu agen adn sort of asked him to look into it for him- I was just wondering for myself by researchign FHA and have found nothing yet to show there would be a duplex problem. Like I said we do have condo docs- so what would be a further road block if any for this guy?
0 votes Thank Flag Link Sun Jun 29, 2008
Buyer’s have options of backing out of a Real Estate transaction. Financing is one of the “Out Clauses”.
I would try to find out if they have “Cold Feet” or if they really are having a problem securing financing first.
My wife and I are agents and always check into the financing directly with the buyer’s lending institution.
Are you selling for sale by owner?
0 votes Thank Flag Link Sun Jun 29, 2008
to clarify- there are condo docs- they exist I have them- the "association"is me and my joined neighbor- so since we have an "association" on paper (and some decision are made together- like getting the new roof) then this shouldnt pose a problem for our interested buyer?
0 votes Thank Flag Link Sat Jun 28, 2008
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