Thanks to Chan790 the dream house may not be dead!

[WillParkinson]

Thanks to the information we got yesterday we're currently talking with the bank on getting a different kind of loan.

The house dream lives...for now. (Keep your fingers crossed.)

And for those who haven't seen the pictures yet:

[fizzgig]

1. i'm loving that kitchen!

i've been following your posts lately and i'm wishing you all the best :)

[kentauros]

6. Same here!

It would be perfect for making truffles

[CaliforniaPeggy]

2. That's great news!

Fingers crossed, my dear WillParkinson!

:hi:

[elleng]

3. Good to hear, thanks to Chan and DU!

[KamaAina]

4. Chan does indeed bring teh awesome

:yourock:

[WillParkinson]

5. Just found more pictures...

http://www.trulia.com/property/photos/29817465-3534-E-Plankinton-Ave-Cudahy-WI-53110#item-20

I love (LOVE) the ceiling fan in the dining room.

[dixiegrrrrl]

8. Looks like you got pocket doors in one room!

I was so thrilled to find pocket doors in our house when we bought it 6 years ago.
Took me a month to figure out we had them.
Very nice glassed in front porch ya got, too. What direction does the front face?

[WillParkinson]

13. Front of the house faces south...

And am I the only one who never heard the term 'pocket doors'? :)

I first heard it when Paul and I went to look at the place. Before that? Never once.

[r54w32]

10. repairs

I looked over the photos you posted,it's a nice lookin house.I don't see that much that needs fixed.Maybe I am missing something horrible but I doubt it .It looks to me like you could fix anything the lender has to bitch about with a couple of hundred bucks and a busy weekend.Can you paint and run a screwdriver?
Get the lender over there,write up a "pick up list" and get the problems fixed.The biggest problems I could see were misssing cover plates (big no no) and the flying saucer indent in the roof dormer and even that is about a 2 hour patch job including sheetrock, primer and paint.

What on earth is your real estate agent thinking? Is She so well fed that she would kill a deal over 2 or 3 hundred dollars worth of parts and a bit of sweat equity?
You want a good foundation,a good roof,good electrical service,clean drains (make sure the drains run well) and no leaking pipes or faucets.It looks to me like you pretty much have all of that covered so rock on!

Quit worrying ,that house is yours as soon as the lender sees it.
If you were here in Seattle I would do your drywall and window trim for nothing.It just isn't that much of a project and it certainly isn't any reason not to fund the sale.

Best of luck to you and yours!
Quit worrying,it is going to be fine!

[Hassin Bin Sober]

15. I'm a lender and I agree.

I don't see any need for a 203k loan. That will add a bunch to the costs (disclaimer: I'm no 203k expert).

You could have the appraisal done and the loan file underwritten "subject to" repairs and finishing to be made before closing.

Get a firm loan commitment based on the "subject to" and get the work done.

I assume there is no one on the seller's side willing to make repairs? - is it bank owned? I assume that is why we are talking about the buyer paying for repairs as opposed to the seller paying.

That realtor is crazy.

This can be done with just a little risk to the buyers. There is risk of doing work on a house you don't own (assuming the seller's agent allows it) As long as there is a firm commitment based only on a re-inspection, I think it's worth a risk of a few hundred bucks.

The whole deal should be contingent on securing a mortgage (to protect earnest money), home inspection AND the house appraising at or above sale price in current condition. Your only risk up to appraisal is what you pay for the appraisal and home inspection.

That would be the path of least resistance but it does have some small risks. Look in to the 203k but those never seemed to work out for me.

[WillParkinson]

17. 203k

The agent (and our banker agree) that unless the home is completed and considered 'inhabitable' there would not be a loan for it. The people still own the house but they have no money to complete said repairs. Paul and I were willing to take it on, but the bank was a no-go for that. The 203k, as suggested by Chan, seems to be the only way for us to get the house. And while it may add some issues at least the work that needs to be done will be professionally completed. The original owners put in a lot of effort into what they've already accomplished. I'd hate to go in there and do a half-ass job just go get to live in a place.

[Hassin Bin Sober]

18. OK. But it sounds like all cosmetic items except maybe the floor.

You are using the term "uninhabitable" and I wonder if the bank is keying off that phrase (the realtor, I think we all agree, is not too bright).

Drywall repairs and trim work doesn't mean uninhabitable. Things like those are typical for new construction and rehabs.... the appraiser has a choice to appraise the property either "as is" which means finished or "subject to See addendum" at which point he will list the items he feels need to be done to bring the house up to finished status. Once the repairs are completed, the appraiser comes back for a final inspection for $75 bucks (ish) and signs off. In the mean time, you have a valuation of the property and the complete file can be underwritten and approved with the final inspection as a condition.

Now, all that said, the 203k may be the way for you to go - especially if you were planning on FHA loan in the first place. Just keep in mind there are some extra title expenses for the 203k closings AND extra PMI expenses for the FHA loan. You may have already been planning on incurring some of these extra expenses if you were planning on using an FHA loan in the first place. FHA requires PMI insurance regardless of down payment amount - no big deal as you were going to get that if you don't have 20% down. Even if you DO have 20% down, FHA will still require PMI. FHA requires an upfront PMI fee based on the loan amount paid in to the FHA pool - this is, IIRC, about 2-2.5% depending on loan to value. This fee is non-refundable (it used to be based on pro-ration).

If you were planning on getting an FHA loan, those fees won't figure in to the added "cost" of the 203k loan. If you were planning on going conventional with say, 10% down, the FHA fees are a lot to pay for a couple hundred bucks worth of work.

ALSO......and this is a big also - keep in mind the FHA appraisal is going to be MUCH MUCH harder on the house. Off the top of my head, they are probably going to require the sidewalk along side the house be replaced. They are probably going to require handrails on the front porch (and all stairs). FHA is really picky about safety items. Garage door openers have to have the proper ant-crush safety mechanisms. The upstairs kitchen will probably have to be disconnected or worse yet, removed (assuming this isn't being purchased as a legal 2-flat). The back door will need to be painted (a conventional underwriter may require that also).

So 203k FHA loan may be the only way for you to go if you were needing an FHA loan in the first place. If you were planning on going conventional, you may find the FHA 203K will have a ton of extra added expenses and repairs needed above and beyond the cosmetic stuff you see - stuff you may want done which would lean you MORE toward the 203k.

Upon further looking, it looks like the house has two electrical meters. Which leads me to believe it is a legal two flat (assuming the power company wouldn't run two meters for an illegal 2flat). By legal, I mean zoned for multi family. If that is the case, you can use anticipated rent to qualify. Hopefully it's zoned two flat or you will have all kinds of other problems.

[mulsh]

7. That's a beautiful house on a charming street.

I wish you the best of luck in getting this place.

[Chan790]

9. Glad to help.

Good Luck!!

[Skittles]

12. YOU ROCK, CHAN!!!

:thumbsup:

[blaze]

11. Hooray for renewed hope!!!

Been following your pursuit for a home for a bit.... I just LOVE this house!!!

The first thing that caught my eye was the staircase!!! Oh, I just love that!!! (but it needs a better lamp... a chandelier!!!) And the pocket door!!!

Oh, I hope this all comes thru for you!!! The house just says "home" to me! :)

[snacker]

14. Fingers crossed...

what a great home!

[GreenPartyVoter]

16. Yay! *fingers crossed*

[HappyMe]

19. Crossing fingers & toes.