The reality is, with REO homes, the bank is really imore nterested in what they can get out of the home than what type of source the money comes from. Unfortunately (for us) VA loans require contingencies that other loan products do not. Things like pest reports, and clear section 1 along with the requirement that the seller pays for the closing costs. These take away from the amount that the banks can get from the house.
Bottom line is if the bank gets two offers, one being an FHA, and one being a VA at asking for a house, the FHA will win because it requires the buyer to pay for their own closing costs. The VA often requires 3% back from the seller to cover that.
To compete with other loans with a VA, you must always markup the offer by 3% so that money can be used for the closing costs. Keep in mind that on occasion, the bank might actually counter with a lower amount for the purchase price. This is because they are concerned about the appraisal. To deal with this, you must have a very good agent who knows the business, and can work with your lender to help compensate with how the loan is wriiten.
In the meantime, the search continues.. stay patient, find yourself a house, That is all you can do. Good luck!
You do not seem to be talking to HUD approved agents. You will need one to see the HUD homes and you can go to Http://www.Bidselect.com to search for the homes and the agent for your area
Now for the loan - you will need to have a pre approved loan in place and be ready to go when you make the offer.
Yes it is true that many of these homes may need repairs and not pass the strict guidelines of the lender.
There will be a preliminary inspection telling you of some of the repairs.
HUD has a loan that will include these repairs and more.
FHA has a $100 down loan - on HUD owned homes - with some small restrictions.
You can not afford to go in with a VA loan and have underwriting or inspection problems that extend the closing. You will not get the home unless you close by a certain date.
HUD will furnish your Title policy.
We are finding many of the HUD owned homes in much better condition now.
The Escrow money will have to come out of my pocket and is not a part of the financed amount. The lending underwriter will require you to get three repair estimates and they will choose the highest estimated. Whatever the amount is you will have to come up with 150% in your Escrow hold back account. So, I wanted to let my fellow Veteran's know, that you do now have the option of bidding on a HUD home and their are now VA lenders out there that will do this for you and that your deal won't go south because of the two government entities having completely convoluted and asinine guidelines when it comes to repair isuses. LOL
The only thing I worry about now for my own HUD circumstances, is the FHA appraisal for the HUD house is ridiculously low. I've been trying to buy a house since March of this year as well as I am a person who does my research and homework on the neighborhood comparables and so on and I just don't know how the FHA appraiser came up with that low of price. It makes me feel HUD really didn't want to sell this particular house to a live in owner/family that these types of HUD/Homepath/Homestep houses are suppose to be geared for.
By appraising it that low, any person who wants to bid on that house would have to bid close to that FHA appraisal amount or bid over and have to paid the difference in cash since your lender is only going to finance what the appraisal amount is for. There is no way if your like me a disabled Veteran on a pension, a retired senior citizen on SS or a low to medium income family is going to be carrying that kind of cash on them to offset a higher bid amount to be able to win the house! Because at that price, this is a great investment property. So, having an appraisal price this low, sticks the financing buyers to a ridiculous low bid price and gives the cash buyers open rein to have at it and have a bidding war for the house since they don't have to stick to an appraisal amount. :(
This house is a cute 1910 2/1 bungalow that's located in the historical district, that's almost been completely rehabbed, located 1/2 block from the city's beautiful open park, 4 blocks from the center of downtown that has been revitalized with a ton of new businesses, restaurants, clothing boutiques, coffee shop and nightlife. It has a walking score of 92 and the two main express transportation lines that will take you anywhere int he Denver/Boulder Metropolitan area is 1 block away from the home and FHA apprised this house for 115K. I don't know anywhere in the world one can find a cute little 2/1 craftsman/key west style bungalow house, that's been rehabbed and located in a downtown historical neighborhood that you can buy for 115K?
Needless to say, I'm worried and hoping the VA appraiser will appraise this home more near the true neighborhood comparables and my offer or I will be out pounding the streets once again. I'll keep you all apprised. :)
HUD isn't allowed to make ANY repairs, and VA buyers are not allowed to make ANY repairs either, but it will not pass inspection as it now is!
The neighbors who had been really nice to us seemed oddly elated our VA loan might fall through due to the damage... explaining they wanted it and would snatch it up if our loan fell through!! We now learn they found out what we got it for and were upset they didn't buy it or get it offered to them on a first-dibs type basis!! So WHO KNOWS, IT COULD EVEN be the neighbors that did the damage to sabatoge our purchase!
Seems unfair (discriminatory actually) that VA qualified VETERANS get omitted from HUD purchases--- HUD homes are half of what's on the market, and most vets know how to fix the deck, or replace he windows and furnace themselves or know a contractor that can, and SHOULD GET THE OPPORTUNITY like other humans that don't fight for our freedom have. Most of the homes we look at have damage up here in the Seattle / Tacoma area, if they have acreage... they get vandalized almost immediately!
HUD Homes do not allow for repairs to be done to meet the appraiser's list of repairs. (If any) All HUD homes have a disclosure of the repairs necessary for a FHA buyer to to close. The disclosure list will assist the lender in setting up a "Repair Escrow Hold back" to allow the buyer to come in with amount estimated on the disclosure and close without actually performing repairs prior to closing, however the buyer will have to complete the repair soon after close, and have lender/appraiser send appraiser to verify the repairs have been performed.
For FHA Buyers HUD will allow for a "Repair Hold Back" which means that the lender will have the buyer pay for the estimated repairs and allow the transaction to close. This hold back is already stated on the listing and is not a credit to buyer for repairs.
VA loans require that the repairs be performed prior to close, however since this is a HUD Home NO REPAIRS can be performed to meet the appraisers list of repairs. THIS is the point that the VA loan and the deal falls apart.
Your question to your lender is "Are you able to close a HUD home using a VA loan and if any repairs are called out will the lender a REPAIR HOLD BACK to allow the property to close without the repairs being performed.
Most VA lenders cannot close at this point and this is why VA buyers have problems.
The good news is there are lenders that can do this and VA Buyers are now able to feel confident purchasing HUD HOMES.
"Every goal must start with a plan and a Realtor is a great source of information to offer the guidance you need to meet your goal of buying a home." David Rodriguez
As an added bonus I rebate you 20% of the commission I make off of the sale back to you after closing.
Talk to a knowledgeable mortgage lender about what loan product will work best for you. Using your VA eligibility may be the way to go for you, or it may not. If you are looking at the 100% financing, there are still government down payment assistance programs available to help with the down payment on an FHA loan. The key to these down payment programs is that they are government programs and not private programs.
HUD offers a FHA $100 down on many of their properties. Let your lender know you are looking at HUD's, because there is no need to use a more restrictive VA loan when buying a HUD property.
Basically with VA and FHA , what they are looking for is a structurally sound, safe house. If you are interested in purchasing a home in Mesquite, I work in Mesquite and would be happy to help you.
217 E. Davis
If there needs to be any repairs, the seller(usually a bank) do not want to make any repairs.
I have seen some instances that they were done.
You need a good realtor with an eye for the things that VA will want repaired.
Let me know if you need a referral to a good realtor over there.
And please feel free to follow up with more specific questions!!