Zillow Advice: Buying Process - What does it mean on a listed property when it says no FHA or Va loans?

Oh, and besides condition ...

Fri, 03 Jul 2009 19:39:00 GMT

Oh, and besides condition of the property and/or sellers not wanting to pay closing costs for buyers. Another option of why this could be noted is, if this is a condo, that the building doesn't meet their requirements of owner occupancy.

FHA requires 51% or more be owner occupied in condo developments. We have a listing like this with one of our colleagues where an 8-unit building has 5 being used as rentals. It won't qualify for FHA.

Just some thoughts...

Besides some of these off ...

Fri, 03 Jul 2009 19:37:00 GMT

Besides some of these off the cuff answers about the state of the property, which could be true, it's possible the seller just doesn't want to pay any of the seller required closing costs for the buyer.

For VA, there are many closing costs for the buyer that are required by the VA loan process to be paid by the seller. I'm working with a client right now who is VA financed and many agents and their clients balk at the idea of having to give upwards of 3% toward the closing fees.

FHA used to have higher requirements, but in WA State, our financing contracts state a minimum of $300.00.

Savvy agents call ahead to ask. I called on a house my client liked that we saw yesterday and the financing section said "cash out, conventional or FHA" but no VA as an option. The agent called me back to say they would consider a VA loan but they'd just accepted another offer the night prior. Always ask.

More then likely the property ...

Fri, 03 Jul 2009 18:05:00 GMT

More then likely the property will not qualify for a FHA or VA loan. ie: the roof or the foundation may have major problems.

The seller is being picky ...

Fri, 03 Jul 2009 12:38:00 GMT

The seller is being picky there thinking that a buyer with 20% down will not be wasting his time. Or it could be that the property has some sort of a defect that would make it ineligible for FHA.

It means you are most likely ...

Thu, 02 Jul 2009 23:40:00 GMT

It means you are most likely going to look at some problems.
If FHA & VA financing is welcome, good signs. If not, BEWARE.
Keep it simple, keep it profitable.

When the opposition wants to control you,
There is always a reason why.

"It's a little presumptuous ...

Thu, 02 Jul 2009 23:20:00 GMT

"It's a little presumptuous that it would be listed that way because of structural defects."

+1

There are many reasons why a seller would refuse FHA-financed offers. As mentioned, the appraisal and/or occupancy cert. issues are probably the most common, but there are other scenarios as well (such as title seasoning requirements for FHA lonas, etc.).

It's a little presumptuous ...

Wed, 10 Jun 2009 17:04:00 GMT

It's a little presumptuous that it would be listed that way because of structural defects. I wouldn't always assume to know everything that's behind a simple financing clause in a listing - each property and each listing agent is different. There are a multitude of "good" lenders out there who are able to facilitate a 203k FHA loan.

It mean the property will ...

Wed, 10 Jun 2009 16:25:00 GMT

It mean the property will not qualify because of structural defects. Simple as that. Don't even bother with a 203k. That will take forever plus the only good company that offers that with good rates is on the mortgage implode list..Taylor Bean. Your best bet is to look for a seller carryback.

In most cases when a listing ...

Wed, 10 Jun 2009 14:56:00 GMT

In most cases when a listing says no FHA or VA loans, it is because the seller or their Realtor thinks that the property will not likely pass the more indepth scope of an FHA or VA appraiser. Unlike conventional appraisals, FHA and VA appraisers are more concerned about the safety and health of the buyer, not only the property's market value. They will take note of items like rotten wood, broken windows, missing screens, mold, termites, and evidence of rodent infestation. They are also looking for smoke detectors and speedy exit access from the bedrooms in case of a fire. A conventional appraisal is more focused on the property's value and sufficient market comparables to feel protected in lending money for the property. There is now an FHA Loan Rehab Program that will now allow for repairs to be completed after closing. It's called FHA 203k. As with other loan programs, there are certainly limitations, but for the most part it appears to be a great option for properties that before, had very little financing options.

Purchase and Rehab with ONE loan and ONE closing
FHA Home Renovation Loan Program (203KS)
Example of 203k Streamline
Household improvement up to $35,000 with 3.5% down payment (can be gifted)
HUD has defined eligible renovations as:
Repair/Replacement of roofs, gutters, and downspouts
Repair/Replacement/Upgrade of existing HVAC systems
Repair/Replacement/Upgrade of plumbing and electrical systems
Repair/Replacement of existing flooring
Minor remodeling such as kitchens, which does not involve structural repairs
Exterior Painting
Weatherization including storm windows&doors, insulation, weather stripping, etc.
Appliances - Purchase & installation are included. Appliances may include free-standing ranges, refrigerators, washers/dryers, dishwashers, & microwaves
Repair/Replace exterior decks or porches
Lead-based paint stabilization or abatement of lead-based paint hazards
Basement finishing & remodeling, which does not involve structural repairs
Basement waterproofing
Window & door replacements & exterior wall re-siding
Septic system and/or well repair or replacement
Improvements for accessibility for persons with disabilities
For lead-based paint stabilization costs above & beyond that paid for by HUD when it sells real estate owned (REO)

I signed a contract on the ...

Wed, 10 Jun 2009 14:03:00 GMT

I signed a contract on the house I'm trying to buy on March 28th.
Today we are hoping to maybe close on Friday. Maybe. We are buying a REO property with a FHA loan through the company that owns that property. To date we have dealt with a terrible FHA inspector that required, among other things, painting the whole interior of the house, removing the roof from an outbuilding, Several inspections that he refused to do himself, Refinishing a tub(he wanted it replaced), replacing an entire septic tank and drain field because we din't know where the drainfield was, and replacing a missing shower head.
FHA is a crapshoot based on the inspector. He can ask for stuff that the FHA no longer requires, or does not require or stuff the buyer can care less about but it will hold up the process.

My advice on a FHA loan, only go with a company that will hire an inspector that they know personally and have dealt with in the past. IF they have a company that does that for them, no matter what they offer you to do thier loan through them, run.