Reduced FHA Loan Maximum. Am I out $13,000

[crumb]

What is the name of your state (only U.S. law)? UT

I have been approved for an fha loan in Highland Utah for $330,000 and we signed papers to build a home for that amount. We have paid $13,000 for half the 'upgrades' and the earnest money and the builder says he will be done in mid December.
We recently found out that starting October 1st the maximum FHA loan we can get is $273,000. This means that we can no longer get the loan since our loan will need to be much higher. We have already given $13,000 to the builder and now we cannot get the loan and he has already started framing the home.

Any advice? Any way I can get my money back and move on to another pricepoint? This is no fault of my own. Maybe the fault of the loan officer but am I just out $13,000?

 

[HomeGuru]

What is the name of your state (only U.S. law)? UT

I have been approved for an fha loan in Highland Utah for $330,000 and we signed papers to build a home for that amount. We have paid $13,000 for half the 'upgrades' and the earnest money and the builder says he will be done in mid December.
We recently found out that starting October 1st the maximum FHA loan we can get is $273,000. This means that we can no longer get the loan since our loan will need to be much higher. We have already given $13,000 to the builder and now we cannot get the loan and he has already started framing the home.

Any advice? Any way I can get my money back and move on to another pricepoint? This is no fault of my own. Maybe the fault of the loan officer but am I just out $13,000?

**A: the answer is no as there is a big difference in loan approval and conditional commitment and prior to funding contingencies etc. You jumped the gun in giving the builder the upgrade monies.

 

[nextwife]

At that price range, why aren't you looking at conevtional options? I sure would not look at FHA as my first loan choice at $300,000+ home price.

 

[HomeGuru]

At that price range, why aren't you looking at conevtional options? I sure would not look at FHA as my first loan choice at $300,000+ home price.

**A: I am pretty sure that was the builder offered financing program.

 

[nextwife]

I'm used to a market where people find their own lot, their own builder, and own financing. Turnkey Builders are very rare here.

Anyway, it may behoove the buyer to check other financing options. Perhaps their lender can submit the loan package to a conventional lender, at a better or comparable rate? Or talk to a local bank. I know several who don't require PMI, but finance unnder 20% DOWN.

I certainly have walked away from financing offered by seller related entities. One often does better on their own when looking for financing.

 

[HomeGuru]

I'm used to a market where people find their own lot, their own builder, and own financing. Turnkey Builders are very rare here.

Anyway, it may behoove the buyer to check other financing options. Perhaps their lender can submit the loan package to a conventional lender, at a better or comparable rate? Or talk to a local bank. I know several who don't require PMI, but finance unnder 20% DOWN.

I certainly have walked away from financing offered by seller related entities. One often does better on their own when looking for financing.

**A: most of the big builders offer their own arranged financing or have mortgage people available. In fact some builders have ownership in the related entities (real estate sales, mortgage, escrow, upgrades etc.) which could be deemed a conflict.

 

[crumb]

This was financing through my own lender, not the builder's lender. The builder wouldn't start building until I paid the $3000 in earnest money and $10,000 for half the upgrades. This is pretty standard from what I have heard.
I am close but not quite where I need to be to get a conventional loan. My debt to income ratio is too high to get a conventional.
So, unless I can find some other way to finance this loan I am out $13,000. Is that right?

 

[Zigner]

This was financing through my own lender, not the builder's lender. The builder wouldn't start building until I paid the $3000 in earnest money and $10,000 for half the upgrades. This is pretty standard from what I have heard.
I am close but not quite where I need to be to get a conventional loan. My debt to income ratio is too high to get a conventional.
So, unless I can find some other way to finance this loan I am out $13,000. Is that right?

That would depend on your contract with the seller. You may be on the hook for much much more than $13,000.00.

 

[HomeGuru]

That would depend on your contract with the seller. You may be on the hook for much much more than $13,000.00.

**A: naw that's downright scary.