Want to buy a house that needs work

[whiteriverrun]

My husband and I are looking at some property that is just amazing. It is agzactly what we want! However, there is one problem. We can not afford it without it being financed. The sellers are wanting to be paid and do not want to work with much. The house is livable but not in shape for a bank to finance it. Does anybody know of a lender that will lend to us even though the house needs a lot of work????

[Junkmanme]

Generally, that sort of arrangement would require the lending to be done by a Private Party. Some real estate agents do that as part of their personal investment scheme. (Those type of loans are very short-term (with balloon payment) and tend to carry a higher interest rate.) You would need to finance it CONVENTIONALLY later, after you fixed it up to fulfill lending requirements. THIS type of loan is RISKY! If you can't pay-off the short-term Ballon Loan...you are in BIG Trouble!

But, that is one way to handle it....if you can find a "private investor".

Of course, it all depends on the Value of the property...always!

Good Luck!

[haypoint]

If it is going to be financed, chances are it would be thru one of the local banks, right? Talk to their Loan Officer, explain the situation. they may be able to do something as a construction loan, with a higher interest rate than a morgage, then you refinance it once it is up to standards. Failing that, explain to the sellers that their property is currently un-financialable. It is likely they already know that. I know you said they didn't seem to be interested in carrying a loan, but if they'd give you a land contract for 2 years, you could get it ready for a bank morgage and pay them off then. What amount of money for this property? What would it take to be financable?

[Beltane]

The bank wouldn't finance our fixer-uppper until we had electricity, working, water, and some safety issues taken care of. Prior to the sale, we made an agreement to get the work done. It worked! We've been in our beautiful 230 year old house for 7 years now! Hang in there - where there is a will there is a way!

[Scott SW Ohio]

I bought a farm with an old house in poor condition and financed it through Farm Credit Services. This might work for you too if most of the value is in the land and not the house.

[michiganfarmer]

Along this same lines, there is a house here, well its not much, its pretty rough shape, on 10 acres for sale for $65,000

[luvrulz]

Plus, there used to be a way to finance thru HUD, I can't remember the name of the program but they also lent you $$$ to fix up the house and you could build up sweat equity by doing the work yourself. Do you have a way of getting info on their programs? It took a while to get it thru and to qualify, but it was a low rate and worked great. Maybe do a search on HUD financing programs.....?

[e.alleg]

I would apply for a loan and let the bank tell you what is needed to get financed. They don't care much about how it looks as long as it isn't going to fall down and it's appraised value is in line with the neighborhood, if the sills are rotted and the foundation crumbling or it is way overpriced then you might be better off to keep looking. Good luck!

[Snafu177]

If the House needs that much work, why dont you just get a Loan to build a new one there?
You will be Money ahead.

[PineRidge]

It depends on what needs to be done that a bank will be willing to finance it.

Our first home was through HUD but upon inspection we were told that the basement needed a vapor barrier to prevent radon gas, and GFCI outlets by the sinks. Since the couple selling the house was old and unable to repair those items, and since it was so cheap to do, my dh got permission to fix them so the house would pass inspection. Then the sellers came down on the price at closing to cover our costs.

Now if the repairs are over a couple hundred dollars, I wouldn't consider repairing a place for someone else. We were lucky that things worked out.

[SteveD(TX)]

You're going to the wrong banks. Lots of banks will make construction loans or "bridge loans" to cover the purchase price and repairs necessary to make it livable. Then you go and get the permanent mortgage. You might try a locally owned independent bank rather than the larger institutions.

[Sparticle]

Originally Posted by whiteriverrun

My husband and I are looking at some property that is just amazing. It is agzactly what we want! However, there is one problem. We can not afford it without it being financed. The sellers are wanting to be paid and do not want to work with much. The house is livable but not in shape for a bank to finance it. Does anybody know of a lender that will lend to us even though the house needs a lot of work????

I'm going through the same thing as we speak. the house we want doesn't qualify for a conventional loan because the heat and AC are missing. it's a really long story, but they are looking for a lender that will give me a re-hab loan (which i don't really want to do either), but if it will get us this house, we can fix it up and then switch to a conventional loan. i'll let you know who we are going to go with.

what state are you in? i'll PM you one of the lenders i spoke with that said they might could help.

[AngieM2]

Streamline 203K loan thru HUD

Check out this site and see if it can help you any.

Angie

[happy@home]

Check with different lenders, one might be able to help you out. A few years back we were looking at a property that needed tons of work but was at a great price. One bank would have loaned us the money on the condition that we hired a contractor to oversee the work, he could contract out the work to us so it wouldn't have cost us a fortune hiring the work out. The bank just wanted someone 'in charge' to make sure it got done but we could do it all ourselves. As it turned out we ended up moving out of the area instead but some banks will work with you on fixer uppers, they may have hoops to jump through but it varies by bank.