Information on a property, Why no FHA or VA loans?

Asked by Sherry, Tampa, FL Thu Jun 23, 2011

I am very interested in the property below, why aren't FHA or VA loans accepted. I want to offer $109,900 its listed for $135,000. Would my offer be to low?

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Alma Kee’s answer
Alma Kee, Agent, Tampa, FL
Tue Jun 28, 2011
Looks like it could be a possible short sale "flip". The Realtor only remarks indicate to make the seller's name on the contract "owner of record". That's a red flag.

Probably not possible to buy for a bargain if they're planning to flip it after they get an approval at a lower sale price.

Do you have a Realtor helping you? If not, you're welcome to sign up for a free ListingBook account on my website and you can get automatic updates of "true" bargains, bank owned listings.

All the best,
Alma Rose Kee, PA
Future Home Realty
Westchase Office
0 votes
, ,
Thu Jun 23, 2011
Hi Sherry - you will see in the listing that it says "Nice home that needs some TLC. No FHA/VA, but we can provide you hard money lender."

TLC means Tender Loving Care, it's a very nice way to say that the home isn't in the best condition, but with a little bit of TLC it can be made into a real nice looking home. They don't feel it'll meet FHA or VA appraisal standards, and since it's a short sale I bet the seller isn't willing to put any of their money in to fix it up to meet FHA or VA appraisal standards. It also looks like a law firm is involved handling it, and time is money for lawyer's, so with a hard money purchase it'll cut down the difficulties a buyer would have with the appraisal portion since hard money lenders aren't as particular about the condition of the property as FHA or VA financing, or even regular conventional financing.

One thing the seller may not realize is that the home could be purchased with a "rehab" type mortgage like FHA's 203k rehab loan program or Fannie Mae HomeStyle Renovation loan program, but those programs take a little bit extra time and involve more variables all due to the "construction approval" portion of the loan, and so again maybe the seller's law firm doesn't want to mess around with buyers who have those types of mortgages.
2 votes
Sally Grenier, Agent, Boulder, CO
Thu Jun 23, 2011
First of all, you need to find a Realtor to work with you as a Buyer's Agent. He/she will be able to research the property and determine what a fair offer would be. Second, some properties are not eligible for FHA or VA financing because of various reasons -- in the case of a single family home like this, it may be in disrepair and need a lot of work. (the lender doesn't want to lend on a property if it is falling apart). Sometimes condos are not eligible for FHA financing because there aren't enough owner occupants.

Find a realtor and they will help you through the process. Good luck!
1 vote
Linda S. Cef…, Agent, Franklin, WI
Thu Jun 23, 2011
Sally hit the nail right on the head. And agents will put this info out there upfront to save everyone the time and trouble.
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