Financing in Texas>Question Details

Abc123, Home Seller in Texas

Switch from Conventional to FHA

Asked by Abc123, Texas Wed Mar 5, 2008

The lender requested that the buyer payoff some old debts and the buyer did this the next day and provided receipts for documentation. The lender then switched the buyer to an FHA loan from a conventional loan, what kind of delay in final loan approval should we expect? Is it like starting over?

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I think your asking "how long will the process take". To answer that question it would go as follows. You have to have an FHA apprasial done, resign documents which include FHA dislosures, re-run credit, and submit to another lender or the same lender but to a FHA underwriter. Total set back should be no more than 3 weeks.
1 vote Thank Flag Link Wed Apr 30, 2008
Not completely starting over. The appraisal has to be redone and the contract has to be re-written. Your bottom line as a seller changes too because there are some fees (called non-allowables) that have to be paid by the seller becasue per FHA guidelines, the buyer cannot pay for them... they run around $1100.00

Usually this is avoided by bumping the sales price by these "non-allowables".
Web Reference:
2 votes Thank Flag Link Wed Mar 5, 2008
There seems to be a good deal of misunderstanding about FHA non-allowables these days. They have been eliminated for the most part. The only remaining FHA non-allowable is the Tax Certification fee, which is typically $105 in Tarrant County, TX. This information comes to me from a Loan Officer at Countrywide Mortgage and is verified by an escrow officer at Republic Title, so I'm confident this is accurate.

Now, VA non-allowables are still out there, so do watch those closely.
1 vote Thank Flag Link Wed Apr 30, 2008
It has been well over 2 weeks since we found out they were switching the loan types and nothing has been mentioned of a different appraisal, contract or the non-allowables. They just keep telling us everything looks good. We missed our first closing date and had to do an addendum, but we have been told it should be any day that they should get the approval. We are now looking at 5 days til our revised closing date and still no news. This is a good offer and we want to be patient and see the deal thru. I just don't want to be surprised by an appraiser that I'm not expecting to show up on my doorstep. Not to mention the rental I have in limbo... I'm just glad we're not trying to buy and sell all at the same time.
0 votes Thank Flag Link Wed Mar 5, 2008
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