Carpet Allowance Question

[ponderous]

When doing the USDA Guaranteed Loan could I have negotiated with my lender a flooring allowance in my loan if my appraisal came in $17,000 above the agreed sales price, and my financial picture could support the addition to the monthly payment? 

[Anonymous]

I thought an allowance was when they paid for the item? Are you trying to finance the carpet since the appraisal came in so much higher?

[ponderous]

Yes.  I knew "carpet allowance" was not the exact terminology since that is negotiated from a seller to a buyer, but I was hoping it would get the idea across well enough since I mentioned I am wondering if it could be added into my mortgage based on the increased value according to the appraisal?  I did not know if it would be at the discretion of the lender or the USDA or just not an option at all.

Message Edited by ponderous on 04-10-2009 06:54 AM

[Anonymous]

I would think they can't just roll that into your mortgage, but perhaps you could increase the sale price with the seller giving you a credit towards the carpet since you already know that the house meets the appraisal requirements, that could work...

Though it may be too late to do that. Don't know.

Message Edited by UpUpUp on 04-10-2009 09:59 AM

[Anonymous]

The answer to that is "no". They consider it the same as a cash incentive to the buyer, which is prohibited.

There is a trial version of the USDA loan that mimics the FHA 203k, in which home improvement/rehabilitation costs are rolled into the mortgage, but it's presently limited to a small number of lenders. (In Ohio there are presently just two.) Sounds like you're too far along in the process to make a switch even if you could find someone able to do it.

[ponderous]

OK, no was the right answer!  I would not want to cause any bumps in what has been the smoothest of transactions fo far and I have been telling myself all along that the improvements I do will be with cash only, as I can afford them.

Then that little devil jumps on my shoulder and starts yapping in my ear about how to get carpet sooner and add it on the loan.  Sheesh....I cannot believe I even asked the question!!  I will have cash by the end of May to do it on my own. 

I am a cash girl....I am a cash girl.  No credit purchases.  No unnecessary loans.

Thank you for listening to my rant....I am fine now. 

[WannaHouse]

Hey, don't forget about the $8000 tax credit! That will buy some carpet! 

[ponderous]

Oh shoot...that was already spent on furniture in my mind on 2/17/09....which of course is the day it was signed into law!  LOL