Financing Quagmire
OK here goes...
I have a foreclosed 3 unit property under contract to purchase for $35,000. I qualify to receive a 5 year forgivable grant in the amount of $36,000 (33,500 from my employer, and 2,500 from Baltimore city) that will go towards the down payment, closing cost and principle as long as I live in the house which I plan to do. But in order to use/receive this grant money I have to purchase the property using a loan. The property doesn't need much work at all. It could use a few upgrades but all systems are functional and 2 units are rented out at a total of $1400/month. Most loan products I have looked at require me to borrow a minimum of $50,000 to do a conventional mort. Wells Fargo could do an FHA loan as low as $15K but after down payment, closing costs, and principle pay down there still has to be $15,000 of Debt remaining for them to do the loan. so that means I could only use about $20K the grant money after down payment and closing costs. leaving me with a $15K mortgage for absolutely no reason. I thought about purchasing the property with cash but at closing placing it in a business associates LLC then selling it to myself under my name for $50K and use all of the incentive $ available from my job but I was told this would raise red flags due to a flipping law. I was also told that I would have to wait 90 days to re-sell it and would need documentation of improvements that would justify the $15K raise in price. I don't want to wait 90 days and I don't want to do unnecessary work just to justify a price raise that I am only doing because banks won't lend me the $ in need to do the deal. I don't want to lose the deal and really want to take advantage of all of the incentive money available to me. does anyone have any suggestions as to ways to make this happen. Oh and I though about using an FHA 203K rehab loan to raise the purchase price but then I will still have conjure up repairs and do unnecessary upgrades just to get the price up to $50K or whatever the minimum is required to do a loan and I feel like I just shouldn't have to do that. Any suggestions would be appreciated.