My wife and I are looking to buy a house in Long Beach, NY and we are first time home buyers. Our plan is to buy a 2 family house and use the house hacking method to get started as RE investors. Currently we have an accepted offer but still have not signed the contract yet (Hopefully this weekend). Once of the contigencies in the contract is to put down 10% (5% at signing and 5% down). We would like to pursue a loan between 3.5% - 5% down using an FHA loan. The only risk i see in going this route is if the bank inspector / appraiser does not want to provide lending due to dis-repair of the house. The inspection report came back with all systems in working condition but I was wondering if there was anything specific that FHA (HUD) inspectors look for. Any help with this would be appreciated.
Also I wanted to know if it was common to agree to 10% down in a contract and then later provide a commitment for a loan that shows only 3.5% - 5% down. Thank you in advance for anyone who can provide advice!
Hi Bryan, I see no comments on this. Sorry I don't have the answer, yet I'm on the same boat. Hopefully you closed successfully on your house. I'm making my offer on my first time home buy. I still have no clue what I'm doing or what I should look for while reviewing the sale agreement. But My agent encourages me to put $2k down as initial deposit for a $190k offer and financing estimate 95%. I was offered by the mortgage broker I talked to the $15k down payment assistance including closing cost.
It would be nice to know what happened to your home purchase.
@Bryan Paul I noticed that you didn't get an answer. I am wondering if the FHA inspection happened yet and if so what was the report?
@Lin Ding Still in this process. I put down 10% of the home price that will be held in escrow from contract signing to closing. I'm currently seeking an FHA loan for 3.5% down (doesn't include closing costs). The 10% sits in escrow and at the closing table I will give the seller my loan amount (96.5% of the agreed to housing price) and they take 3.5% from escrow and the rest of the money in escrow will be sent back to me. Not sure if you could assign rest of the escrow monies to anyone else for closing costs but I would take to your mortgage broker and attorney about that.
@Christopher Wedde Appraisal / Inspection by the HUD inspector happened yesterday and I have not received the report back yet. I heard it went well but will let you know what happens. This house needed 2 new kitchens. The other stuff was cosmetic.
@Christopher Wedde . I received the HUD report back and it was clear. Strange too since the outlets weren't grounded.
@Bryan Paul That's good news! I don't believe the outlets have to be grounded depending on the age of the house and the last time the electrical work was done. Rules change based on the town, I think the minimum is whatever portion you touch during a repair has to be in code at the end, though that can be a vague meaning. However if you do plan on re-wiring the house they will have to be grounded then.
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