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No luck finding FHA approved home

jmw1
Frequent Contributor

Re: No luck finding FHA approved home


@sueblue34 wrote:

yes I was approved for fha at the max limit so anything more I would have to cover. Right now I'm unable to add additional funds upfront which is killing me because of my sky high rent. I may have to result a fixer upper. 


FHA requires a move-in ready home. They won't accept a fixer upper because you need many thousands of dollars in reserve to fix it and your down payment is already too small. Fixer uppers are for those with a lot of cash reserves.

 

 

 

 

Message 11 of 18
ShanetheMortgageMan
Super Contributor

Re: No luck finding FHA approved home


@jmw1 wrote:

@sueblue34 wrote:

yes I was approved for fha at the max limit so anything more I would have to cover. Right now I'm unable to add additional funds upfront which is killing me because of my sky high rent. I may have to result a fixer upper. 


FHA requires a move-in ready home. They won't accept a fixer upper because you need many thousands of dollars in reserve to fix it and your down payment is already too small. Fixer uppers are for those with a lot of cash reserves.

 


FHA has a rehab program called the FHA 203(k) loan which can finance needed repairs in order to bring it up to FHA's minimum property requirements.  It's a great program and opens the doors to those types of homes which typically have less buyers interested in them (increases the chances of a seller accepted your offer).

Helping people with mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
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Message 12 of 18
sueblue34
Frequent Contributor

Re: No luck finding FHA approved home

I will look into this. Thx!

Message 13 of 18
Itgem679
New Contributor

Re: No luck finding FHA approved home

Portland Or here. While I'm not sure what advice I can offer, I can definitely commiserate with you. I received an FHA approval for $270k - most, if not all, homes are priced at 295K and up here in Portland. I have been told every house is either cash-only, has a cash offer, or the sellers won't pay for closing costs. It's really frustrating. My pre-approval would increase to $350k if I didn't have a 5-year-old repo that I can't seem to get removed. Even then, seems as though Cash Is King. I'd love to meet the people who CAN afford to do this. 

At this point, for myself, I'm just saving (more) money and trying to fight the repo. I'm hoping if I can bring more to the table, I can find something. Also, I have heard shopping with more than one Mortgage lender is advised to help you get the best rate and pre-approval.

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Message 14 of 18
toi34
Established Contributor

Re: No luck finding FHA approved home

San Francisco, Bay Area here -- here's another strategy you could try:

My friend is moving into his home near Silicon Valley as I type and he was FHA. I don't have to tell how CRAZY upon crazy the market is up here, but his agent suggested he meet the sellers in person, and that way he could tell his story and build a rappor with them. It worked! They accepted his offer over ALL the numerous cash buyers who were willing to waive all contingencies. He put 3.5% down, the house came-in appraised at asking price, and like I mentioned, he's moving in today!

So try that and see if it works. ♥

Message 15 of 18
jmw1
Frequent Contributor

Re: No luck finding FHA approved home


@ShanetheMortgageMan wrote:

@jmw1 wrote:

@sueblue34 wrote:

yes I was approved for fha at the max limit so anything more I would have to cover. Right now I'm unable to add additional funds upfront which is killing me because of my sky high rent. I may have to result a fixer upper. 


FHA requires a move-in ready home. They won't accept a fixer upper because you need many thousands of dollars in reserve to fix it and your down payment is already too small. Fixer uppers are for those with a lot of cash reserves.

 


FHA has a rehab program called the FHA 203(k) loan which can finance needed repairs in order to bring it up to FHA's minimum property requirements.  It's a great program and opens the doors to those types of homes which typically have less buyers interested in them (increases the chances of a seller accepted your offer).


203k/203b loans on fixer uppers have a lot of downsides too. 203k/203b loans have much higher interest rate than regular FHA loans.  Contractors are hard and expensive to find now and you will have lots of delays which may threaten the FHA deadline to finish your renovation. 203b gives you a tiny $5k repair fund while the 203k is a $35k repair fund. $35k doesn't get you very far in 2021/2022 if the house needs moderate TLC or more.  The fixer upper house could be a real money pit if additional problems are found and the $35k isn't enough and then you'll wish you were still renting an apartment where the landlord pays for every repair. 

 

 

Message 16 of 18
AnalogKid
Established Member

Re: No luck finding FHA approved home

Consider your situation a blessing. Don't EVER get into a "bidding war" for an asset that can go up or down. Let these morons bid against each other and pay 25, 50, 75K more for a house then they should have. Just keep renting if possible for a bit. The market, any market, including housing, will fall eventually and you'll be there to pick up the pieces form some clown who paid WAY too much for his house. Keep putting in bids and for everyone you get turned down on, thank your lucky stars. You'll find the right one. I did. Just takes patience. Every offer I wrote, I wrote for the asking, IF the house was worth it, and gave the seller 24 hours to respond. Patience paid off. In a house that appraised over the asking and the loan was closed in under 30 days. Right now you are simply feeling the pressure of "missing out". Do teh exact opposite of what your brain is telling you to do. Best wishes my friend.

Message 17 of 18
iced
Valued Contributor

Re: No luck finding FHA approved home


@AnalogKid wrote:

Consider your situation a blessing. Don't EVER get into a "bidding war" for an asset that can go up or down. Let these morons bid against each other and pay 25, 50, 75K more for a house then they should have. Just keep renting if possible for a bit. The market, any market, including housing, will fall eventually and you'll be there to pick up the pieces form some clown who paid WAY too much for his house. Keep putting in bids and for everyone you get turned down on, thank your lucky stars. You'll find the right one. I did. Just takes patience. Every offer I wrote, I wrote for the asking, IF the house was worth it, and gave the seller 24 hours to respond. Patience paid off. In a house that appraised over the asking and the loan was closed in under 30 days. Right now you are simply feeling the pressure of "missing out". Do teh exact opposite of what your brain is telling you to do. Best wishes my friend.


A common tactic around here is to intentionally underlist a condo or home's asking price to draw in additional attention. You'll see a place with comps in the $1.3 or $1.4 million range with an asking price of $1.1 or even $999k because 50 people now think they can maybe snag a bargain. Enough who know the FMV bid and it ends up selling for $1.3 to $1.4 million -- several hundred thousand above asking. If someone sticks to asking price or some laughable amount like $25k over, they've got no shot at these places.

 

More success is going to be found going in with knowledge of the comps and and FMV of the property and putting in an offer based on those numbers instead.

Message 18 of 18
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