I'm looking a possibly buying me a small 1100 sqft house here soon. It was built in 1995 and is currently in ownership by a reverse mortgage company after the owner passed away. The listing advised that the property is being sold as is and is subject to HUD Guidelines 24 CFR 206.125
We called the Agent to set up a visit sometime next week. Since I don't make a lot of money, we thought we might look into a possible USDA Rural Development loan.
The Agent advised that since the house has some issues that need fixing, a leaky gas water heater and an issue with the metal roof was installed that is allowing air to get into the house, that the house would not qualify for any kind of mortgage by a bank and that I would have to get a normal loan or pay in cash -- get the issues fixed, cleared by an inspector, and then I could refinance the house.
What's the issue? The house appears to be in very decent condition minus the small issues that shouldn't be nothing to get fixed. Why would a bank refuse to do a mortgage on a house because of that?
We still haven't met with the Agent yet, that'll happen next week when we do the tour, but I'd like to get some responses about this before going into the meeting.
Added (1). Okay, I understand the issue is because the bank doesn't trust me to get the repairs done, so in the unlikely event that I default, they can't sell the house easily and are stuck with a loss. I get that.
Is there any kind conventional home loan (30 year type) this house could qualify for? Not including the FHA 203k loan. Regions Bank has a First Time Home Buyer program that requires no down payment. Would this house not even qualify for that?
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