FHA loan property under market value

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Michael N.
Investor · Arlington, VA · Member since 2016 · 67 posts · 65 votes
8y
Multi-family is very rare in my area. Not many comps to compare to. As a result, I FHA’d a duplex, it appraised for 100k over purchase price. Refinanced a few months later. It’s possible. Good luck.
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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    8y
    Originally posted by @Ray Minjarez:

    Is it possible to get an FHA loan on a property that is under market value?

     Certainly, why would a lender care that you're getting a great deal? That makes it a safer loan, if anything. :)

    (But, no, you can't use that "free equity" in place of a down payment or to remove pmi, etc)

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  • Ray Minjarez
    OP
    San Antonio, TX · Member since 2018 · 13 posts · 1 vote
    8y

    will you be able to refinance and pull that equity?

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y
    Well, “under market value” usually means it needs some work, which may make the Condition of the property make it ineligible for fha.
    0Reply
  • Michael N.
    Investor · Arlington, VA · Member since 2016 · 67 posts · 65 votes
    8y
    Multi-family is very rare in my area. Not many comps to compare to. As a result, I FHA’d a duplex, it appraised for 100k over purchase price. Refinanced a few months later. It’s possible. Good luck.
    1Reply
  • Ray Minjarez
    OP
    San Antonio, TX · Member since 2018 · 13 posts · 1 vote
    8y
    At what point would the FHA be denied as far as the condition? Where would they draw that line where they would say “no, it needs too much work”
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