Monday, August 1, 2011

The Highs And Lows

My realtor asked my mortgage agent if not having a water heater and stove would be a problem. He asked the underwriters and they said that a water heater is a must but the stove doesn't really matter. So, I can make an offer contingent on the seller installing a water heater so that the home is livable thus qualifying me for a conventional loan. At least I think that is what was decided. My realtor is writing up the papers and we will go over them tomorrow. After all this I really won't be that disappointed if Fannie Mae says no deal. I just paid the bill for my new temporary crown to fix my broken tooth so if this deal doesn't work out I should wait a month or two to save up some more money. There aren't any other houses that I like on the market anyway.


Anonymous said...

I'd be surprised (but happy for you) if Fannie Mae agreed to any repairs, usually they insist the Buyer use FNMA's P&S form without any modifications. "As is" generally means "as is" even if the proposed repair is as simple as installing a water heater.

FNMA is in the unusual position of being the Seller, a potential lender through their Homepath Program, and the author of underwriting for guidelines for other lenders. FNMA has already had the property appraised and because they wrote the underwriting guidelines used by most conventional lenders (FHA and VA excluded), they know it won't pass an appraisal/inspection. I don't remember the exact dollar amount, but FNMA has a budget for repairs per house and a water heater and/or stove should be well within that budget. There is likely something else beyond cosmetic wear and tear that is keeping the property from meeting the guidelines.

If your own bank sells their loans to FNMA then I would not bother pursuing a conventional loan with them. You'll want a bank who holds their own loans (usually a local savings bank or credit union)or sells to an investor willing to take the risk of a subprime property. Expect to pay a slightly higher interest rate for the latter.

Daizy said...

I bet you are right and Fannie Mae will just tell me to go get a Home Path Loan.