{"id":12539,"date":"2011-03-10T11:54:44","date_gmt":"2011-03-10T11:54:44","guid":{"rendered":"http:\/\/template.lenderama.com\/?p=672"},"modified":"2011-03-10T11:54:44","modified_gmt":"2011-03-10T11:54:44","slug":"important-factors-to-consider-when-getting-financing-on-a-foreclosure-short-sale-or-new-construction","status":"publish","type":"post","link":"https:\/\/dev203k.orbitwebx.com\/dev203k\/important-factors-to-consider-when-getting-financing-on-a-foreclosure-short-sale-or-new-construction\/","title":{"rendered":"Important Factors To Consider When Getting Financing On A Foreclosure, Short Sale or New Construction"},"content":{"rendered":"

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Important Factors To Consider When Getting Financing On A Foreclosure, Short Sale or New Construction<\/p>\n

Short sales, foreclosures and new construction homes all have caveats that need to be considered when pursuing financing in Louisiana, Texas, Oklahoma, Arkansas and New Mexico<\/strong>.\u00a0 Furthermore a lot of short sales or foreclosures require repair to it’s important to remember that loans such as the FHA 203k, Fannie Mae HomeStyle and Fannie Mae HomePath Renovation<\/a> exist.<\/p>\n

If the guidelines and potential pitfalls are not properly understood, you could face delays in closing or potentially even a denied loan.<\/p>\n

Short Sales & Foreclosures<\/strong> –<\/h2>\n

Short sales and foreclosures are everywhere in Texas, Louisiana, New Mexico, Arkansas and Oklahoma. They often represent great value when looking to by a new home and can put you in a nice equity position.<\/p>\n

However, they also present a unique set of problems that home buyers need to be aware of and plan for.<\/p>\n

1.) Property Condition<\/strong><\/p>\n

Typically, when homeowners are facing foreclosure or looking to short sell their house, it means they lack the financial means to pay the mortgage or maintain the property.<\/p>\n

A property in poor health can cause many financing issues for traditional financing.\u00a0 FHA loans have specific rules requiring that the property is move in ready, unless you’re using an FHA 203k\u00a0Rehab Loan<\/a>.<\/p>\n

2.) Timing Challenges<\/strong><\/p>\n

Short sales typically come with awkward timeframes for purchase contract approval and loan closing.<\/p>\n

Each bank is different, but approval can take anywhere between a week to 120 days.\u00a0 As a general rule, the larger the bank the longer it takes to get short sale approval.<\/p>\n

The lack of a set timeframe for short sale approval makes the timing of loan submission, rate locks and closing very challenging.<\/p>\n

You have your approval conditions cleared to close on time, just to find out that new appraisals, income, employment and asset verifications need to be updated by an underwriter to cover the most recent 30 days.<\/p>\n

Worse case, purchase contracts and legal documents may have to be re-submitted to a bank for an updated approval.<\/p>\n

Either way, be prepared for a lot of redundant paperwork when purchasing a short sale property.<\/p>\n

New Construction<\/a> –<\/h2>\n

Home buyers looking to purchase new construction using FHA financing will have more hoops to jump through than those purchasing through conventional (Fannie Mae \/ Freddie Mac) financing.<\/p>\n

If you want to use FHA financing to purchase new construction then you need to be aware of a number of issues that can trip you up.<\/p>\n

First, you MUST have a certificate of occupancy (C.O.) certifying that the property is complete and move in ready. If you do not have this then you typically CANNOT go FHA. You\u2019ll need a renovation loan, but a FHA 203K WILL NOT work but the Fannie Mae HomeStyle or HomePath<\/a> can be the answer.<\/p>\n

You\u2019ll need to employ the Fannie Mae Homestyle for a property without a C.O.<\/strong><\/p>\n

In addition to the C.O. you\u2019ll need some combination of the following documents as dictated by your lender and your unique situation:<\/p>\n