Foreclosure Addendum doesn't allow extra funds?

Question

Anyone run across this? I'm purchasing a foreclosure, but ran across this paragraph in the addendum.

So, how do i get additional funds for renovations?

I hope you can read the small print!!

Account Closed · Answer

Thanks, @Bill G. ! Ah see, our purchase contract is for 90k, but our lender is willing to loan us 100k to cover rehab costs. That's where my confusion lies. It wasn't going to be a separate transaction.

Account Closed · Answer

Thanks, @Wayne Brooks ! I suppose i was reading too much into it. Thanks again :)

William Cunningham · Answer

Yes, I meant 20% - thanks

Wayne Brooks · Answer

@William Cunningham

Generally, only if it's a FNMA REO, and it's 120% for 90 days.

William Cunningham · Answer

You should be able to secure the note for up to $99k. The foreclosure deed has a restriction for 110% of purchase price for the first 90 days.

Bill Gulley · Answer

Hi, that has nothing to do with funds being received by another lender, which won't be on that transaction, what they are talking about is credits back to a buyer that constitutes less in the deal than as contracted, you are not to be walking away with cash after settlement. Your purchase will be closed first, then if you're getting a rehab loan, that is a subsequent transaction in another settlement.

Don't know the seller, but your lender could disburse as purchase money if the lender cleared it with the seller providing docs to the nature of the loan, they may not want to do that. They want to reduce cash out purchases under fraudulent circumstances.

I'd just suggest close the transaction and then close with the lender with your note and deed of trust, If the construction lender needs title coverage, ask the title company to run it off the same commitment. It's two separate transactions. :)

Wayne Brooks · Answer

That has nothing to do with borrowing additional money for renovations.  If you are financing, AND getting a seller credit toward closing costs, it simply says the seller won't credit you (give back) more money than you've put into the closing costs.