House with no functional kitchen

Asked by 87, 33706 Fri Jan 1, 2010

I heard that banks do not want to lend money for a house with no functional kitchen. Why? How to work this out? What's my options? There is a house that I like but the kitchen is not functional. The house is below market price because of this. My credit is excellent, I have 20% down payment and I have extra cash to rebuild the kitchen.

Thank you.

Help the community by answering this question:

+ web reference
Web reference:


Pamela Cohn, Agent, Clearwater, FL
Fri Jan 1, 2010

Checking with mortgage brokers and lenders for a possible solution, such as a renovation loan, is your best bet. As one person already stated you may need to take out mortgage insurance. I think Wells Fargo, Chase and Bank of America both have programs available. I don't know if 20% down would allow waiving the mortgage insurance in this case. One of the newer programs is set up with Lowes, where they come out and price the whole project.

I would NOT reccomend "Take the risk.... Complete the kitchen. Have your attorney hold escrow, etc.". Unless Miami is different than our side ....there are documents at closing that you must sign, for your loan, that state you have NOT done anything to the property that could incure any potential liens.

Are you currently looking for a home or just browsing on line for now? I have a free service called “Listingbook”, which I provide for my clients. It is like a back door into the MLS which updates daily: price changes, solds & withdrawns, allowing you to really be able to follow and learn the market. I set up a basic search according to your guidelines. Once you are in, you can change the parameters as you need. If this is something you would be interested in let me know.


Pam Cohn
Broker Associate, GRI, CDM
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
0 votes
Mack McCoy, Agent, Seattle, WA
Fri Jan 1, 2010
Yeah, banks like to resell the loans they make, and it's tough to do that when the property has no functional kitchen.

Your option, if you don't like the FHA rehab loan, is to find a non-conforming loan that will allow you to pursue this project. Non-conforming loans are more expensive than conventional and conforming loans.

Or, you can just find another freaking house with a kitchen!
0 votes
Genevieve Ra…, Agent, Punta Gorda, FL
Fri Jan 1, 2010
Speak to a lender. This way you will get concrete answers and know how to proceed. I am sure there are ways around this. Get an inspection done you find out everything else that could be wrong.

Good Luck!

Genevieve Ramachandran
Punta Gorda Realty
0 votes
Kelly Putz, Agent, Fairfax, VA
Fri Jan 1, 2010
Speak to your lender. I had a client recently buy a Foreclosure home in northern Virginia directly from Bank of America, with a regular FHA loan, and both the bank and the FHA inspector said everything was fine for the loan, even though it did not have a functioning dishwasher, a functioning disposal, had a gas leak in the stovetop and did not even HAVE a refrigerator. My broker and I were flabbergasted that FHA would approve this, but they change their regulations almost weekly.

Check with your lender and see what they say, but ALWAYS have a home inspection done by a licensed inspector (you'll have to pay for it, $300-$400) and make your contract contingent upon it, because if the kitchen is non-functioning, you don't know what else is wrong until.
0 votes
CJ Brasiel, Agent, San Jose, CA
Fri Jan 1, 2010
87 -

If a lender will not provide a loan on the house because of a non-functional kitchen, every buyer does not have all cash will find the same challenge. Realizing this fact, the seller and their listing agent may very well be willing to work with you. Find out from your loan officer/underwriting what exactly is the condition for funding. Have them list the issues (probably from the appraisal?) that indicates a "non-working" kitchen and negotiate with the seller to repair prior to close of escrow. If I were negotiating the deal, I would push the seller to complete all prior to close of escrow. The seller will have this challenge with anyone that is not paying all cash.

Web Reference:
0 votes
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Fri Jan 1, 2010
Even though it would not be the most desirable loan to take, you would be able to get a 203K loan, which is an FHA renovation loan. The negative about this for you is the need for mortgage insurance. Fannie Mae also has some kind of renovation loan that you could look into. I am not familiar with it because it is not that popular, but you may not need to pay PMI if you are putting down 20%. I am assuming you qualify. These days Credit and assets are not enough, you need to show income as well.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Fri Jan 1, 2010
Protect yourself and speak to an attorney specializing in real estate--does the kitchen have a stove, what's making it not functional, I wonder.

0 votes
Mott Marvin…, Agent, Sunny Isles Beach, FL
Fri Jan 1, 2010
Take the risk.... Complete the kitchen. Have your attorney hold escrow, etc.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more