Financing for home purchased at auction - Posted by Jay

Posted by Eric on December 08, 2008 at 19:47:37:

Call around and ask if the lenders in your area are writing 203K loans.

these loans are structed for the use of a purchase and rehab of the home, and were sanctioned under hud.

You can learn more by going to HUD.gov website and reading up on them.

You can also check with the local town and see if they offer any grants or low interst loans for the rehab. Alot places are doing this to get properties out of foreclosure and back on to the tax records.

Financing for home purchased at auction - Posted by Jay

Posted by Jay on December 07, 2008 at 24:01:27:

Hello everyone,
I recently won an auction for a home that needs some minor repairs but the contract of sale prohibits any repairs to be done before closing. In addition, my mortgage company will not close a loan until all repairs are complete. They will not allow the repairs to be put in escrow. They will only finance the sale price of the home. I am between a rock and a hard place! What can I do? I have called multiple lenders and all say the same thing. The seller does not want anyone doing repairs because of liability concerns. I will lose my earnest money of $5K if this doesn’t go through.

HELP!!!

Jay

Re: Financing for home purchased at auction - Posted by brandoncbsre

Posted by brandoncbsre on December 07, 2008 at 05:25:32:

Most lenders have their hands tied in a case like this because they arent really lenders, they are originators. The loan has to meet certain requirements for them to sell it into the secondary market. You need to be working with a small local bank. If the house will be worth more once the repairs have been made they may even finance it based after repair value. Your only other option with a mortgage company/broker is an FHA 203K loan.

Re: Financing for home purchased at auction - Posted by Jay

Posted by Jay on December 07, 2008 at 24:31:03:

By the way, I’m in Peoria, IL and the selling price was $105K. I put 5% down at auction and I plan to use it as my primary residence. Deadline to close is 12/18/08.

Jay