Home Buying in La Puente>Question Details

Curious In Lp, Home Buyer in La Puente, CA

why do agents @ open houses say its difficult when going through a FHA loan for an offer to be accepted?

Asked by Curious In Lp, La Puente, CA Thu Jul 23, 2009

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9
If that is what your encountering then maybe it's time to change tactics and the type of financing.

Go after properties that have been on the market longer or that need repairs or even better both and use the FHA "203k" http://www.203kmortgagelender.com instead of the FHA 203b which allows you to buy & fix it all in one loan.

Maybe that might help your chances in finding, buying and turning something that you might have overlooked before into what was there all along...your diamond in the rough.
0 votes Thank Flag Link Fri Jul 24, 2009
I don't think FHA is difficult as long as you get pre-approved first and work with an agent familar with the inspections. If the agent is knows the process it can be smooth. I was just blogging about FHA today: http://www.trulia.com/blog/david_chamberlain/2009/07/fha_loans
0 votes Thank Flag Link Fri Jul 24, 2009
It is true that FHA loans are getting done I agree. I work primarily with first time homebuyers and most are FHA. I have definately gotten FHA offers accepted, but it is a little more challenging now because of the price point that a lot of my clients are at. Most of these homes are being purchased for cash.

I was merely pointing out that typically FHA loans, in this current market, are a little more challenging to get accepted. I think that is what these other agents are trying to say as well.

Micki
0 votes Thank Flag Link Thu Jul 23, 2009
Being a REO agent, ALL the banks I deal with would rather accept a CONVENTIONAL loan rather than an FHA loan. Also, buyers are not allowed to FIX anything or alter the property before they purchase the property. So even if it is a few hundred dollars if no one is willing or able to fix the problem it doesn't get done and therefore the property DOES NOT qualify for FHA.

We need to be honest with our clients and not continue to string them along when their offers are not getting accepted. If the buyers know right from the beginning that FHA offers are not being looked at as much as conventional offers they will understand when they are out bid by all cash or conventional offers.
0 votes Thank Flag Link Thu Jul 23, 2009
I think there is a major misconception out there about FHA. It is really not that bad at all. FHA loans have climbed from 5% of all loans in 2005 and are now approaching 30-40% of all loans originated in the USA! So someone is closing FHA loans!

I think sellers are stuck in old thinking about FHA loans. I close a lot of them and I think in many cases they are easier than conventional. With an FHA loan the loan officer still gets to pick the appraiser and it can be a local experience appraiser. With conventional you have to order appraisals through the new HVCC process which has been a disaster. Sometimes the HVCC appraisers are 60 miles away and have no clue about the local markets and are getting paid cut rate wages.

Also, if you don't call out termite in the purchase contract, you do not need a termite clearance with an FHA loan. And the items the FHA appraiser often asks to be fixed are extremely minor. Many times items that cost a few hundred dollars that the buyer can just pay to have fixed if the bank doesn't want to.

So in summary, Realtors need to step out of the past and realize FHA loans are really not that different than conventional. In fact they have much more flexible credit, asset and ratio guidelines.
0 votes Thank Flag Link Thu Jul 23, 2009
FHA is really difficult for banks because there are repairs that have to be made and the banks do not want to make them. In order for a house to qualify for FHA it has to meet government standards and that means investing more money in to the home.

Dyanna
0 votes Thank Flag Link Thu Jul 23, 2009
Curious,
I think that the agents are just trying to be realistic. Contrary to what the media says, homes are FLYING off the market. It is not uncommon for bank owned properties to receive over 20+ offers the day it comes on the market. A good majority of these homes are being purchased with cash or conventional loans. It is not impossible to get an FHA offer accepted but it is a little more challenging. The banks want to get these assets off their books so of course they are going to choose the offer that will accomplish that the quickest. You may even see properties that have been sold for less than what you may have offered and it may simply be because someone offered them a cash deal up front.

Don't be discouraged though. Work with your agent to develop the best strategy for the market area you are searching in so that you can be a successful FHA homebuyer.

Hope this helps!

Micki
0 votes Thank Flag Link Thu Jul 23, 2009
no..am looking at what Im qualified for.. but recently Inoticed that the agents have been honest and tell me that FHA they look at last when submitting an offer...
0 votes Thank Flag Link Thu Jul 23, 2009
Are you looking at a high priced home? FHA has limits on loan amounts.
0 votes Thank Flag Link Thu Jul 23, 2009
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