(Closed) FHA loan with a house that needs this work- would they approve??

posted 7 years ago in Home
Post # 3
Member
1572 posts
Bumble bee
  • Wedding: September 2012

@yassim: I’m dealing with this as we speak. Currently Fiance and I are getting an FHA loan on a house that needs a lot of work! Its definitely something to look into. We are buying the house for $180k and looking to get the 203K rehab loan which would allow us to roll another $32k into the mortgage for repairs and upgrades which must be done by a contractor. The hosue was last assessed for oover $350k. Right now we are waiting on the estimate from the contractor that will be doing the work. Our offer has been accepted and we’re just waiting on the loan but I have to admit the FHA loans are supposed to take anywhere form 30-60 days according to our mortgage guy. If you google 203k loan you’ll be able to read up on it. But if you have any questions feel free to PM me. Good luck!

Post # 4
Member
7431 posts
Busy Beekeeper
  • Wedding: October 2009

@nickels: She basically said what I was going to say, either you can go straight FHA if the house meets requirements, or get a 203k loan for fixing things up. I would definitely go to a government site and check out the requirements. I know our realtor was really knowledgeable (she specialized in fha and 203k loans) so she could tell just by looking at a house (obviously, whatever you could see with the eye at this point) if we could go straight or not

Post # 5
Member
1090 posts
Bumble bee
  • Wedding: October 2011

@yassim: oh boy. Well, our house (FHA on a foreclosure) had no kitchen cabinets (had one on the wall & one base) along with countertop (with nothing under it), no kitchen floor, no sink in the bathroom, and exposed wiring and piping in bathroom.

They accepted our offer, we got the financing except they needed to do the FHA appraisal/inspection. It came back denied & they told us it would continue to do so until it was fixed. My Fiance went in and fixed it all before we even closed. It was super risky, but the realtors knew if we went to the bank (seller) they would not do it as it was also an AS IS.

We went and bought cheap linoleum and carpet taped it to the floor, put up cheap drywall, bought a sink on craigslist and fixed electrical (exposed). It cost us probably 200.00 to fix but we PASSED!

 

Post # 6
Member
984 posts
Busy bee
  • Wedding: April 2010

@yassim: It really depends on the type of work that needs to be done, the minor things you are talking about shouldn’t negate the FHA requirements (but they might). However, inspection could prove that there are problems that will prevent you from purchasing. A home we fell in love with had our offer accepted but upon inspection we found out there was over $20k worth of repairs to the foundation and roof and we ended up walkign away. FHA requirements really make it so you aren’t buying a money pit, which is awesome but it can be a pain in the butt when there are seemingly easy fixes that FHA won’t approve.

Post # 7
Member
609 posts
Busy bee
  • Wedding: January 2009

we did an FHA rehab loan. basically it had the cost of the repairs built into the loan. We just had to have someone come out and give us a bid on what it would cost to do the repairs and submitted that with the loan so they knew how much more to give us.

So anytime we did the work we just submitted the recipets and the bank cut us a check to pay it off. kind of sucked that we had to put it all on cards but we got the money right away to pay it off so it wasnt bad.

Post # 8
Member
1572 posts
Bumble bee
  • Wedding: September 2012

I also believe if you’re doing the 203k rehab FHA loan the house does not need to pass inpsection in order for you to get the financing. We aren’t even getting an inspection (I know this is normally a big NO-NO) but the house would never pass the way it is now and it it is being sold as is. It needs EVERYTHING, new appliances, kictchen cupboards, new roof, sheet rock, paint, floors, windows, decks replaced, you name it, its needs it haha. But the house we are looking to buy, the land is worth more than what we’re paying for the pitiful looking 4 bedrrom, 2.5 bath. I have to admit, where this is our second purchase, I’m finding the whole FHA process a lot slower and more stressful than our other mortgage process, but its worth it I think.

@chittychittybanebane: It sounds like your experoience was not good at all! I hope ours doesn’t turn out that way, I don’t think I could live in the house the way it is now. Quick thinking on your part to do everything the way you did!

Post # 9
Member
1572 posts
Bumble bee
  • Wedding: September 2012

@MrsJules10: Can you tell me how long it took the contarctor to give you the bid amount to do the work? Our contarctor will be a close firend but I’m getting fed up becasue it’s taking him 4 weeks to finsih the estimate. I feel like that is waaay too long! Or maybe I’m just being unreasonable? Also, how long did it take them to approce the bid and the financing? I’m getting anxious!

Post # 10
Member
955 posts
Busy bee
  • Wedding: April 2011

We did an FHA loan and our house had a broken window in the garage, no appliances, and a few outlet covers missing. We had to have the window fixed before they would let us close and they let us know only 3 days before closing that this was the case. The other things they went ahead and let go, they didn’t want to but they finally said ok. Good Luck!

Post # 11
Member
609 posts
Busy bee
  • Wedding: January 2009

@nickels: We got our quote back in about 5 days from our contractor. it was a pretty detailed bid too. ours was for an entire kitchen, windows, and flooring (our house was in pretty bad shape when we bought it). We gave that to our loan officer and i think after that we got approved for our loan the following week. then it took about another 2 weeks to do all the paper work and close everything out. and we had 6 months to complete all the work if i remember correctly.

Post # 12
Member
1572 posts
Bumble bee
  • Wedding: September 2012

@MrsJules10:Thanks for that info, I’m going insane right now trying to get our bid in to get everything finalized. It’s hard becasue I know the friend we’re hiring will do a good job, but the amount of time he’s taking to do the bid is ridiculous. I hate not being in control lol.

Post # 14
Member
609 posts
Busy bee
  • Wedding: January 2009

@yassim: yes everything we got was very clear-cut so we werent left guessing on anything which was nice. and i would think we had things that wouldnt have passed but they did.

Post # 15
Member
1088 posts
Bumble bee
  • Wedding: August 2010

We just bought a house with FHA loan and there were a few things that needed fixing. After the appraisal, they told us to fix it so it would past the next inspection. We had to fix or remove the jacuzzi outside, paint the wood outside, add lightswitch covers, add Carbon monoxide alarms, fix or buy new stove. We actually did all of it and then it passed inspection the second time and we were able to close. It is stressful and scary and a bunch of what ifs go through your mind. But come up with a game plan to fix things or take them out. For example, we took the jacuzzi out and put in garage and it passed. Now we can fix it and put it back.

I don’t think the appliance thing is relevant, they just want things that ARE there to work. We didn’t have a fridge or washer/dryer and that was fine. But the oven that was there needed fixing.

I know stuff is confusing but the loan officers and agents know what tehy’re doing and they will help you through the process as far as how to get things fixed so that you can get everything approved. Good luck!!

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