Hello BP community. I have a friend who is considering selling his duplex. He put 3.5% down on the property using an FHA loan and I am trying to determine what it would take for me to assume his loan. A few questions I have:
1) Is it possible for me to assume the same FHA loan at the low interest rate he has locked in?
2) Would I have to live in one half of the duplex for at least one year?
3) What cash would I need to come up with? ex) Difference in current loan amount to the current appraised value? Down payment amount?
4) Are there any other considerations I should take in to account?
Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
4y
Jake,
It is very liekly that he signed a "Non-Assumable" addendum with his FHA lender. This is "Very" common with FHA loans with very few exceptions. UNlike VA loans FHA has an addendum that requires the borrower sign to acknowledge the loan cannot be assumed. You can always do a "Subject to" contract but that may cause an issue with your friends FHA lender/contract.
You could have your friend refinance the loan into a conventional loan and add you to title and after 6 months you could refinance it into your name. If your friend moves out of the FHA property it will make it harder for him to use FHA again. Rule of thuumb is you buy a home using FHA and refinance before you move out because it causes your refinance rate to be higher due to a non-occupied property aka investment.
Hello BP community. I have a friend who is considering selling his duplex. He put 3.5% down on the property using an FHA loan and I am trying to determine what it would take for me to assume his loan. A few questions I have:
1) Is it possible for me to assume the same FHA loan at the low interest rate he has locked in?
2) Would I have to live in one half of the duplex for at least one year?
3) What cash would I need to come up with? ex) Difference in current loan amount to the current appraised value? Down payment amount?
4) Are there any other considerations I should take in to account?
Any advice would be much appreciated!
I would say there is a likely chance you cant assume the loan. Is there a way he can sell it to you off market and you get your own financing? If you are worried about the rate I totally understand. Just qualified at 7% with 800+ score :(