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Switching from Conventional to FHA During Contract

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Re: Switching from Conventional to FHA During Contract

You will be just fine.  I just closed on March 5th and my LO did the same thing.  Put in the offer as conventional and during escrow

changed to FHA as I was able to get more lender credit.  I am in California as well.  Good Luck!!!

Starting Score: 550's
Score: Equifax 626 TU 613 Experian 671
Lender pull 01/22/2013 Eq 641 TU 636 Exp 670
Goal Score: 720
Closed Escrow on 03/05/2013!!!
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Message 11 of 14
Contributor

Re: Switching from Conventional to FHA During Contract

I guess in a way it is decieving to the sellers however we are not affecting the seller in any way what so ever.

 

The many realtors I have been working with have stated that the order of most offer acceptance is CASH, CONVENTIONAL, FHA in that order.

 

I figured that if we offer via conventional (WE ARE APPROVED FOR BOTH), then convert back to FHA during contract, it might do the trick to getting the offer accepted.

MyFICO Pulled: (11/28/2012) EQ 635, TU 650, EX 661
Lender Pulled: (12/05/2012) EQ 635, TU 677, EX 641
Lender Pulled: (02/20/2013) EQ 667, TU 661, EX 648
MyFICO Pulled: (05/30/2013) EQ 712, TU 685, EX 686

Finally Hit the 700's as of 06/05/2013!!!
Message 12 of 14
Frequent Contributor

Re: Switching from Conventional to FHA During Contract

If you're trying to do it just to get the offer accepted, that's not a good idea. FHA appraisals are different than conventional, and they may require certain repairs/improvements to be done that wouldn't be required for conventional.

 

If the property is perfect and complies with all FHA guidelines, then it shouldn't matter either way to the seller. But if the seller knows that the property has issues that would have to be addressed for an FHA loan, and they accept a conventional offer instead of FHA because of that, then that's going to be a problem. The seller could refuse to pay for the FHA required issues, and then you either have to pay for them or you lose the house. If I was a seller, and someone did that to me, I'd be really angry.

Scores:
07/29/12: EX FICO (Amex) 684 | EQ MyFICO 631 | TU Walmart 695
Current: EX FICO (MyFICO) 733 | EQ (MyFICO) 683 | TU (Walmart) 745

First Goal: 700+ across the board - Got it on EX & TU!!!
Message 13 of 14
Contributor

Re: Switching from Conventional to FHA During Contract

Bumped an old thread - 

 

This just happened with us. We were in a multiple bid situation on a Homepath house (beautiful, and great condition) and were approved for Conventional and FHA. We intended to go Convential and used that in our offer. Well, it fell through due to Mortgage Insurance (we were only putting down 5%). So we are switching to FHA. The listing agent says it isn't an issue, but we haven't seen any addendums being done. We close on the 5th (crossing fingers, only conditionally approved right now). 

 

Thought I'd add this in case it helps anyone in the future. 


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Message 14 of 14
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