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Funky Loan Scenario

So I had an interesting scenario today. I have a first time homebuyer that is looking at buying some inexpensive property here in Wilmington (OK, I know...strike one). He wants 100% financing (strike 2) so I took a loan app, and he has no bad credit but a mediocre score of 642. He has a great job and makes plenty of money and can qualify for maybe 150K. He just doesn't want to spend over $700 per month. (maybe a ball or a foul here...lol)

So based with the monthly payment on mind, he and realtor take off on the search. They found a condo right next to UNCW. Its like $70,000, 2 bedrooms, 2 baths, and a shared kitchen. A lot of students rent a place there. I thought all was fine. Its low-rise, we can do the My Community loan at 100%, and stay right in his price range. EXCEPT....it has 90% investor concentration. (STRIKE 3!!) This is a non-warrantable condo that won't fit into any Fannie or Freddie guidelines. OUCH!

This is the deal killer....any LO's out there know of way this can be done? I've exhausted all of my regular sources and even the funky Alt-A places. So I'm turning to the AR community to see if LO's have any ideas. Right now, I'm thinking they just need to find another property, but the only thing in that price range is a run-down crackhouse. Yes, I can say that...I'm not a realtor! LOL

PS I've checked My Community, Freddie 100, FHA, Emerging Markets, 80/20 scenarios, Home Opportunities, and House America....nothing so far.

Posted by Tony D. Howell on 07/25/2007 12:28 PM

Comments (13)

13 Comments on Funky Loan Scenario

JUL

2007

If you're a broker try the big boys like Well Fargo or Countrywide, they may be able to get it done in some type of niche product. The 100% could be an issue but it's worth a shot.

There are still plenty of products that are full doc, 100% that fit your parameters. The toughest issue is the non-warrantable condo, so you'll have to look at First Franklin or Interfirst. Both of them will work with your specific requirements. I cannot lend in Oklahoma or I would be more than happy to help!

Have you checked the guidelines up to date? I thought that Freddie removed that condition a while ago? Maybe it was just because I was with Wells Fargo when I did the deal but we had not required a condo questionaire in while on condo's.

Jamey....yes of course, those were the first 2 places I checked.

Bill....been there already too, and I'm in NC, not OK

Leo....nope....no go on Freddie

What about running the scenario through Fannie Mae/DO/DU

...the ONLY issue may be the non-warrantable condo....evrything else would work.

Try Nat city or Mortgage IT

Nat city has a niche product for 100% for sure

642 score.....is it full doc? W nat city it has to be

yes this is full doc...any regular home would be fine. This 90% investor stuff kills any deal out there. Kris....this is the problem, you think I haven't already tried that? LOL

JUL

2007

I was going to say the same thing as Jamey. Wells Fargo is who we use when we do a condo conversion. When the project starts 100% of the condos are owned by one investor. They are able to do these loans, then roll them over in to a traditional portfolio once ownership hits 51%. Another option that would unfortunately cut you out is have the seller do owner financing.

In the past I have come across this same issue. What I did was have the lender that you are working with on the approval, go for a fannie Condo approval. The last time I did one it took approximately 2 weeks and the fee was $200.00, but in the end the development was approved and I ended up refinancing several of the units. Just a thought.

US Bank Barrier Buster may work for this program. It is a manual U/W ONLY, they do not want LP ran at all. They do allow non-warrantable condos on this loan program. This program has worked for me on a lot of "out of the box" scenarios. If you need a contact for a rep, just let me know. Good luck.

AUG

2007

Tony--- I dont know if you are still working on this but the only one I know that will even consider an investor saturation like that is Amstar/Gemstone. I doubt you will get to 100% but I believe they will consider the condo. Maybe he can scape up the down payment.

Good luck!

FEB

2008

You should post your scenario on http://www.myepricer.com . Its a portal designed to streamline the loan process by simply reducing the required hours it takes a Loan Officer to "shop" a loan and for an wholesale Account Executive to find more business.

If you are not sure which lender can fund your loans or if you would like to comparison shop, go to this site. With one quick submission, you can comparison shop rates and rebates among a large pool of lenders within minutes. Try http://www.myepricer.com

MAR

2008

this looks like a great service.

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