Today, I had two different people ask some very good questions regarding FHA financing that I thought I’d share. Read on…
Q. Is there no way to buy with less that 10% down? I keep getting passed over by someone with more cash!
A. Don’t give up just use another tactic. Typically properties that have just hit the market are the hottest so why not take a look at the one’s that have been on the market longer? Those properties would be more negotiable and can be an opportunity for you.
So putting down less than 10% would no longer be as big of an issue and you can even go with the minimum FHA down payment of 3.5%
Bottom line avoid the turn key properties and look for that diamond in the rough.
Q. What does it mean when a home is not qualified for FHA financing? I am approved for a FHA loan. Some of the homes that I have been interested in will not accept FHA financing.
A. There can be two reasons why a property doesn’t “qualify” for FHA financing.
1) the Seller is just looking for Buyers who can put down a larger down payment and figures a Conventional loan would close faster and easier or
2) the Seller is under the impression that the property won’t qualify for a standard FHA loan due to deferred maintenance that they aren’t willing to fix
If it’s reason (1) then there’s not much you can do until the property sits on the market for awhile and the Seller has a change of heart. But if it’s reason (2) then you and those who represent you need to explain to the Seller that you plan to use the FHA 203k and not a standard FHA 203B loan.
With the FHA 203K you no longer have the problem of the property not qualifying. And now the Seller doesn’t have to make those repairs they were concerned about.
Until next time
“Your 203K Mortgage Lender”