Home Buying in Manhattan>Question Details

kevgosoft, Home Seller in Manhattan, KS

Where can someone with a 590 credit score get and FHA refinance loan to buyout their two siblings.?

Asked by kevgosoft, Manhattan, KS Fri Jan 31, 2014

The home is owned free and clear so he owns 1/3 already. The two selling siblings are willing to take less than market value for a gift of equity. Do any banks in Kansas do FHA loans by the book and can help the buyer finance the loan? Everyone has self imposed limits of 620 or 640 now but the FHA rules go down to 580 and even lower with certain stipulations, one problem is local banks find FHA too complicated to work with and also their investors set their limits to 620 and will only try to do traditional mortgages. Who will do real FHA loans anymore?

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Ken Schmidt, MBA, REALTOR®’s answer
Your observation is right. Most lenders have overlays, which are institutional guidelines directing the lending process, which require credit scores of 620 to 640. In many cases, local lenders have more room to work with special circumstances, as long as they meet the federal FHA guidelines. Those overlays are normally implemented to avoid buy-backs of defaulted loans.

I am not in Manhattan to assist, but you might contact your local Board Of REALTORS® and ask for names of local agents who specialize in FHA loans. In most cases any agent should be well versed in area lender offerings and will have contact numbers on speed-dial to assist.

Good luck!

-Ken Schmidt
McGrew Real Estate
Lawrence, KS
0 votes Thank Flag Link Tue Feb 4, 2014
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