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Almost perfect home, for client, but needs new roof and flooring. Credit gets client FHA approval but house will not pass for an FHA loan. Owner financing is an option.
If clients goes owner financing route and considering that the client makes the necessary repairs before his balloon payment, could he refinance the owner financed property to a FHA loan?
Almost perfect home, for client, but needs new roof and flooring. Credit gets client FHA approval but house will not pass for an FHA loan. Owner financing is an option.
If clients goes owner financing route and considering that the client makes the necessary repairs before his balloon payment, could he refinance the owner financed property to a FHA loan?
Have you considered getting a conventional bank loan for 80% with the seller carrying a second mortgage of most of the rest of the selling price? I've bought numerous properties with this or some slight variation of this technique.
Why the concern about later refinancing with a FHA loan?
Buying with owner financing with a plan to get a loan to pay off a balloon payment can be a dangerous strategy. Sure, it can work, but if financing can't be obtained the purchaser could end up losing everything invested in the property. It's better to secure financing with the initial purchase.
Almost perfect home, for client, but needs new roof and flooring. Credit gets client FHA approval but house will not pass for an FHA loan. Owner financing is an option.
If clients goes owner financing route and considering that the client makes the necessary repairs before his balloon payment, could he refinance the owner financed property to a FHA loan?
If the house needs a roof, it might need to be replaced before FHA allows it to close.
Why not get the borrower into fully-underwritten Pre-Approval, then the seller can pay for the new roof and flooring and adjust the price accordingly.
Private mortgage financing with FHA will be difficult as it will be based on the purchase price and you cannot do a cash-out FHA refi (higher than sales price) until your buyer has owned the property for 1 year. Also if it is a cashout FHA refi you will be bound to 80% of the value and will not be able to pay the lien.
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