Real Estate Investor · Miami, FL · Member since 2009 · 45 posts · 1 vote
I am working on refinancing, and this house just happens to be my primary residence. So all i am looking for is a regular old morgage where the LTV is less than 50%??
After talking to a broker yesterday he got back to me today and told me that he could not get any kind of a good deal on a loan for me because my house in an area where the primary zoning is AU (agricultural). However it is recorded as residential single family and has a [b] stating that. If you are familiar with the Florida Redlands then you will know what kind of property i am talking about.
2 questions
1. I cannot imagine that all the homes in this area have no mortgages that would be silly. So why am i having this problem. Would not the CU for residential use override the AU zoning for lending purposes.
2. Assuming that the CU does not override the AU zoning even though the residence is perfectly legal, why are the mortgage rates offered so much higher?
I'm sure some of the experts in the forum will know how I can fight this problem?
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
15y
Can you access courthouse records for mortgages (either online or by a walk-in visit)? If so, then see who the lender is for the properties nearby, and see what type of mortgage they got. Then go try to get the same!
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
15y
Hi, the rule in the secondary boils down to "Customary for the area". Your broker is incorrect in saying that rural or Ag zoned properties can not be sold in the secondary (that's where the 30 yr. fixed rates are). The appraiser has to state on the appraisal that such zoning for residential properties is common in the area. Also, the amount of land taken for collateral will be limited, to area, as to no more than three to five acres generally, and as to value, not exceeding 20% of the total residential value.
This is really an underwriting question, as the lenders that broker deals with may not want any rural properties. It's not that they can't do it, it's that they don't want to do it.
I also suggest you contact USDA for rural home loans if you and your area qualifies under USDA guidelines. USDA will be more forgiving on the appraisal side as to what is common for the area. And, you don't have to be farming or in an Ag business to qualify!
You might also check with other brokers/lenders. Good luck....
Real Estate Investor · Miami, FL · Member since 2009 · 45 posts · 1 vote
15y
Thanks for the insightful replies...
if you look at the zoning map you can see that all of the properties look like mine. I have a very small lot (2 acres) but they all show the same mix of ag and residential. very "typical for the area".
I"m going to follow all of the suggestions made and see what happens..