All Forum Posts by: Nnabuenyi Anigbogu

Douglass is correct. As far as i know there is absolutely nothing you can do since you are not the legal owner of the building. You only option is to tell the seller that you cannot close without that unit being vacant as per the underwriter since its an OO loan.

If it is vacant and in good condition during your final walk-through then you are good to go. If it is not vacant then you do not close. If its vacant but damaged then the building condition has changed since you entered into contract and you have reason to renegotiate with seller for them to fix it or give you a credit. If you cant reach an agreement then you don't close.

Congrats Dawn! Man if i could pay a house off in 3 years ..... too bad these Chicago prices wont allow that. 

Two months just to get preapproved is unacceptable to me. I would start the process with another bank. 

FHA is already a longer process than conventional due to the extra things the govt needs to insure the loan. If the bank is dragging its feet right now i would expect it to take 4-5 months to close after finding a property. Start over now before you get too far into the process with them.

@Frank Jiang

I agree with you on the loan part but not on the gift funds. According to the govt regulations as written by Fannie and Freddie, once you have gift funds (or any funds) in your account for 60+ days it is no longer considered gift funds but just part of your own funds.

That means that you are not using gift funds to purchase property. You are using your own funds. After a certain amount of time all the funds in your account are considered yours. If fannie changes the regulation to 6 months then you can get money from relatives and in 6 months use it for a DP. It just happens to be set at two months. 

I ran this by my attorney at he agreed that it is not fraudulent unless the bank has its own overlays. I want someone to show me documentation of this being prohibited by Fannie/freddie. All the written govt documentation i have read corroborates that funds are considered yours after 60 days no matter the source (as long as its legal). Please show me where it says otherwise.

@Scot Howat

Not doubting you but please show me where in the fannie mae guidelines it specifically forbids seasoned funds even if it is from a gift. From all my research i have only seen it said that gift funds cannot be used for investments but this applies to all funds that were deposited within the last 60 days. Funds deposited outside of that window is allowed as part of the DP. 

Afterall there has to be a cutoff point at which a gift is no longer considered a gift but seen as part of your own funds. I.E. If i got a 50k gift from my parents 6 months ago i should be able to use it for anything i want including investment loans. Where is the cutoff point? 2, 6, 12 months? Fannie mae seems to have decided it is at 2 months so i still believe it shouldn't be seen as fraud. 

This is all my interpretation (and advice of multiple mortgage loan officers). It could be wrong though

You learn something new everyday. I have had more than one mortgage officer recommend this strategy to me. And my research showed it was a viable strategy. This is the first time I've heard it called fraud. I'll definitely look into it some more. 

@Doron Rice

For you primary residence you used a regular lender and not a hard money lender. All conventional lenders without fail will verify the source of your downpayment. Especially if they plan to sell it. Only portfolio lenders might have leeway but even then they will most likely verify and source all large transactions.

@Account Closed

I never said anything about your knowledge. I know you are a lender and have been in this game over half as long as ive been alive. I was just stating my experience for those not used to hard money. 

The lender im using for my current flip is actually not local but has about 50+ loans out here in the Chicago area right now and i know they have completed loans into the thousands over the last few years. They did not require my bank statements. They only asked for a personal financial statement and you have to bring the points and DP to closing.  The other two lenders i talked to stated point blank that they did not care where the DP was from. They only look at your statements to ensure you have the money to close.

It could be contrary to what is available in the market and most lenders might care about DP source but this has been my experience so far. im not doubting the truth of what you are saying.

@Account Closed

I have yet to meet a hard money lender that actually verifies or cares if you DP is a gift. The ones i know want you to have skin in the game and that means you come up with 20% down. I know of investors that source their downpayments from credit cards and other people. I had the cash for my hard money loan but i never provided bank statements so there is no way for the HML to know the source of the funds.

Not saying you are wrong just speaking from my experience.

Others above with more mortgage have answered you question regarding the job history aspect. One thing i just wanted to point out which can be very important is to remember that you are a first time home buyer. That means there is a chance you can qualify for special programs target to first time home buyers. These programs are usually state or city based so you would have to do research in your area. You can get anywhere from 2k to 30k in down payment assistance and favorable loan terms depending on the state. 

Check it out as you go along.