I am trying to use a USDA RDA loan to buy a Fannie Mae REO forclosure, and I'm stuck with a problem.

Asked by Diamondshark_dj, Coldwater, MS Sun Aug 23, 2009

I am under contract to purchase a fannie mae home. I signed the contract and was planning on using taylor, bean and whitaker for the lender. They went out of business, so I had no lender. I did not get the inspection done during the 10-day period - I was not able to find a lender who would work with me (NO credit score) before that period was over. We have since done a home inspection and have found some items related to the safety and livability of the home, but the listing agent is telling me the only way to even find out if they will fix these (lender required) repairs, is to pay for an appraisal with these items on the appraisal. This doesn't sound right to me. I don't think a buyer should have to pay for an appraisal just to see if fannie mae will do the repairs. The problems are no working heat or a/c, breaker/fuse panel issue, small roofing issue at the masthead, and minor cosmetic water damage to some of wood siding. We plan on using USDA RDA loan for financing.

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3
James Gordon…, Agent, Hamilton, OH
Sun Aug 23, 2009
Diamondshark has your agent made you aware of the conditions on a property to use the USDA program? The requirements on the property are a little more stringent than on a FHA loan. USDA would be the answer for a loan product for someone with no credit score but the home must be in good condition or the seller must be willing to make it that way. Here is a link to a partial list of the USDA requirements it is an 8 page checklist that the appraiser has to use.

http://www.rurdev.usda.gov/id/5-0_Existing.pdf

Good Luck and there are other lenders out the can do an USDA loan.
Web Reference:  http://www.Find1Home.com
1 vote
Bill Jenkins, Agent, Danville, VA
Fri Mar 16, 2012
Typically Fannie mae will not make any pre existing repairs once an offer has been inspected. You have 10 days to conduct a full inspection and determine if you wish to continue with the sale. The listing agent can give Fannie Mae your findings and request but typically they wont repair. They may determine to re negotiate the price but thats about it. If your agent is the listing agent and were aware of the non functional systems in the home, they should have told you up front about them, and you may have found a solution prior to making and getting an accepted offer. If you cant repair chances are the appraisal will not be favorable and you will be unable to secure a loan without working mechanicals in the home. You should have know all this at the time or prior to making an offer. If I were you I would ask for my earnest money back and a release from the contract. The next think I would do is get rid of your realtor and get one who works for your best interest.
0 votes
Vassi Saviano, Agent, Elk Grove Village, IL
Sun Aug 23, 2009
Do you have a buyer's agent representing you in the transaction? Is seems to me that you are having difficulty obtaining a loan, due to your lack of credit. Would you be able to get someone to co-sign with you? Secondly, should you be able to successfully obtain a loan, you may have problems in having your loan approved due to your lender's requirements about the condition of the home. I am not familiar with your area, however in my experience, foreclosed homes are usually sold AS IS, no matter what the condition is. It is the buyer's responsibility to conduct inspection tests at his/her expense. Based on the inspections you must decide if the problems involved are ones that you are willing to undertake. Usually these transactions are cash transactions if the home requires repairs that make the home inhabitable. In addition, these properties are sold to the buyer with no survey, and tax pro-rations at 100%, Good Luck.
Web Reference:  http://www.VassiSaviano.com
0 votes
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