Ns, Home Buyer in California

REO with no kitchen - how to get financing?

Asked by Ns, California Fri May 8, 2009

Please help! We're interested in an REO that has been completely stripped of it's kitchen (nothing is left). We've got approval for a conventional loan, but I'm told that even a conventional won't get approved on a house that's not livable. An FHA rehab isn't an option for us. Are there any other options?

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James Ryan, Mortgage Broker Or Lender, Leesburg, VA
Mon Aug 16, 2010
wow Robin, I did not see how old this thread is....LOL, I wonder why Trulia sent it to my email this morning as a new question?

I agree, Ns is probably cooking in that new kitchen today. I do not usually rehash old threads, my bad!
Hope everyone has a great week! Jim, HSOA.
0 votes
Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Mon Aug 16, 2010
That's great James, but I would think by now either he did this, or he passed. Ns, can you tell us what you decided to do, and if you did the 203K, were you happy about the results.
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James Ryan, Mortgage Broker Or Lender, Leesburg, VA
Mon Aug 16, 2010
Hi Ns, good morning. Tom is a bit off, you cannot use an FHA streamline for a purchase...however, the good news is if you qualified for a conventional loan, it is 99.99% certain you will qualify for an FHA 203K, which allows for the rehab.
Another option is get the seller's permission prior to the appraisal, and install the kitchen, then order the appraisal.
Third option is to use a hard money short term lender that gets you in the house, complete the kitchen, then refinance under the program of your choice.
Jacquelin's sales that closed with conventional financing "as-is" without kitchens are totally outside the guidelines for Fannie or Freddie loans. I can only assume somehow the Appraiser missed the kitchen issues, or they were noted and the underwriter missed them. Perhaps those homes closed in the past or with a loan to value that allowed only a drive-by appraisal, where the appraiser does not enter the home. Unfortunately, guidelines now are much stricter on the appraisals.
I hope these comments help, and you get the financing and the home of your dreams!
Jim Ryan, Home Savings of America, 703 591 5626 ext 419.
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Tom Jarrell, , Fresno County, CA
Thu Jul 2, 2009
Have you thought of an FHA streamline? tell me why you don't feel you can go with a FHA rehab loan.. We are an FHA approved Lender and have the experiance to complete your loan needs..

Tom Jarrell
Elite Mortgage and Financial Services
1-866-363-3548 (elite)
0 votes
Jacquelin An…, Agent, Sacramento, CA
Sat May 9, 2009
You should check with your lender and see what the underwriter is going to require, and see what the appraiser is going to call. I have sold REO's without kitchens before and they went through fine and we were able to close in the "as-is" condition.

However, there have been other times where there needed to be a stove that was in and working and so we had to go back to the bank and negotatiate an oven, or the permission for the buyer to install the oven so the appraiser could go back out and sign off on it.

All banks have different underwriting requirements and only your lender will know what they are.
Web Reference:  http://www.homesearch916.com
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