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Profile picture for PorscheEwen

FHA Loan-Cash at closing

Posted 1 hr ago
Trying to buy a home for a year. Every home fell through. We gave up. We paid for a medical procedure I needed.

Then, my Realtor tells us that our dream home from June is back up, and we were backup. We had an hour before they removed our bid. We ran the #s and would have just enough money with a DPA program. We won. Lender tells me that we can't use the DPA program. The old owners took up the carpet in the master bd, and the home is disqualified. It is considered unfinished. That leaves us 5k short, and we have $6.5. HUD home.No repairs (Didn't know.)

This home is perfect, and it is listed at only 86k. Ugh, I am just sick with anxiety. It's all I think about. 

Asked about 203k, but he said it had to be at least 110k with 5k in repairs. 
Can I put the carpet in the HUD home myself? Any advice?








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October 20 2013 - US
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Answers (24)

Profile picture for PorscheEwen
They are not charging the loan origination fee, and he also increased the rate to 4.75% but that only gave $700 back for closing costs.
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October 23 2013
I think it is a great idea to include repairs that will be needed in the next 5-7 years particularly when you do not have the ability to accumulate savings.

Are they using over par pricing to pay some of your closing costs? 
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October 23 2013
Profile picture for PorscheEwen
Okay, so this is where we are right now.
We are doing a 203k with 10k in repairs. The house doesn't necessarily NEED 10k in repairs, but he told me I should go ahead and include things I want done now. Appliances, flooring, paint. Is this a good idea?

We are currently at needing $8377 at closing.

I have now saved $7200.  
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October 23 2013
You can also finance in the repair escrow on a HUD PD upto 110% of the "as is" value.  You shoudl be able to do this loan with the assets you have.
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October 22 2013
Your loan officer is actually correct, [content removed by Zillow moderator, see our Good Neighbor Policy].  The cost of the UFMIP may be financed in the FHA loan only if the total loan amount (including UFMIP) does not exceed 100% of the properties "as is" appraised value. Since your appraised value is $86,000 and your selling price is $90,500, you cannot finance it with this program. You can still solve your problem with premium pricing and it's even easier today than it was when I first answered. 
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October 22 2013
UFMIP is based on the loan amount and typically financed into the transaction, not brought in cash to the table although that is an option.
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October 22 2013

Your loan officer doesn;t know what he is talking about or is doing a poor job of explaining the issue.

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October 22 2013
Profile picture for PorscheEwen
So I spoke with my lender today.

We had it to where my UFMIP would be rolled into my loan. Now he is saying that because we bid over on the home, government regulations state that the UFMIP must be paid at closing and cannot be rolled into the loan. Is this correct?
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October 22 2013
I think this borrower has a fairly simple problem. They only have $6500 right now and $4600 needs to go to DP and to cover the amount over appraisal. All they need to do is take a higher rate and use premium to pay the other costs. I don't know how Georgia works, but it would be easy here in CA to add the carpeting after closing but prior to funding. Maybe Clay Branch can weigh in on the topic and come up with a simple solution. Getting the out of pocket to less than the $6500 they have available is the easiest part.
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October 21 2013
Who said it was the floor that needed repair?
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October 21 2013
Andrew, I did one like this January this year. It was not a renovation loan. Carpet was ripped out and was replaced with wood flooring. This was done and reinspected with in 5 days after closing. Escrow was funded by the borrower. Fell free to contact me through my profile and I will be glad to help clarify for you.

Porsche, if your current lender is not working out for you I would recomend getting with another lender licensed in your sate that can help you get it done.
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October 21 2013
Good advice for painting the floor. Also depends on condition of the floor. The loan amount seems to the other sticking point with your current lender. I have no minimum loan limit on my FHA 203k loans. As mentioned earlier, contact me thru my profile and I will help you get your home.
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October 21 2013
I have had the same issue with other buyers.  The floor needs to be finished.  The quickest and cheapest way to do this is to throw a coat of paint on the floor. Doesn't matter what color. As long as the floor is finished, you should be good to go. Ask the seller to put a quick coat of paint (or to let you paint it). Then go back to the lender and have them do a reinspect. Hope this gets you your dream home.
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October 21 2013
I can do a 203k loan at your requested loan amount. May I ask, why are you paying more for the house than the list price? Contact me thru my profile. I want to help you get this house!!!!!!!!   :-)

Thanks
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October 21 2013
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I am in Georgia.

I have $6500 right now.
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October 21 2013
Your issue is you are under agreement over asking on a HUD pd. to meet the minimum cash investment you will need to bring a minimum of 4600.
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October 21 2013
Porsche, what state are you in?
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October 20 2013
Profile picture for PorscheEwen
My lender did not give me an option to do a 203k. I researched it my self, and he told me the price had to be 110k with at least 5k in repairs. Is that false?

Here are my current costs:
List price: 86000
Offer: 90500
We have to pay the difference in cash so
4500
DP: 100
Closing: 3200
Prepaids: 1200
Repair Escrow: 1155
Pmi: 1505
=11660

Is there ANY way to get this down? What questions should I be asking my lender? You all are amazing, and I appreciate your help x1000.
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October 20 2013
When was the last time someone actually closed on a a loan with a repair escrow. for repairs to be made after closing?  Without it being a renovation loan.  I am amzed at how many folks suggest it and I have not seen it happen in years! 
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October 20 2013
You should ask your lender if this being a HUD home, would this qualify under the $100 down with repair escrow? If not, can premium pricing be used to cover some of the difference of the shortage? You may be able to fund a repair escrow to be completed within the first 2 weeks of closing.
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October 20 2013
You would fund the repair escrow from the proceds of your loan.
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October 20 2013
Profile picture for PorscheEwen
I was told that they can add either Repair Escrow or PMI into the loan, but not both. PMI is more expensive than Repairs 1500 compared to 1155. So I chose PMI.

So I should push 203k more? That will save a bit off of closing costs. I won't have to pay the repair escrow upfront, right?
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October 20 2013
No reason you couldn't do this loan as a 203K.
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October 20 2013

See if your lender will let you escrow it into your loan. Hud will let you close with a "repair escrow".

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October 20 2013
 
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