Lending Woes!
It just gets worse and worse in the lending arena. I am so tired of having people being denied financing because the banks don’t want to lend. First there are the buyer's themselves. The tightened lending standards for the buyers has made it so most buyers can't qualify under today's standards. I have had four buyers refused financing, even under FHA or USDA, because they didn’t fit the tightened ratios that went in effect this year.
They were all first time homebuyers, exactly the buyers we would like to see entering the marketplace but they can’t buy under the new rules. Maybe they have one car payment or one credit card bill and that pushes them over the limit. The lenders tell them if they pay off the vehicle or the card they can give them a loan. The buyers just shake their heads and tell the lenders, well, if I did that then I wouldn’t have any money left for down payment or closing costs. It is the old catch 22. Can’t if you do, can’t if you don’t.
Then you add in properties that banks consider unworthy and you have another layer of difficulty. Most of the affordable homes in our area are either small older homes that need work, or manufactured homes. Both are huge no no’s for the banks. They don't even want to look at manufactured homes and most of our affordable properties are manufactured homes.
Right now I have a buyer trying to find financing for one of my listings. Thus far three lenders have turned him down. Not because of the buyer’s circumstances, but because it is a manufactured home on acreage. It was originally a single-wide home that has been completely upgraded and remodeled, has a beautiful 1200 square foot great room, den, & mud room. It includes three covered decks, a four car garage plus a 2 car carport, & it sits on 2.5 acres of prime real estate. We are talking paved road, all utilities, in a nice rural neighborhood. These lenders have refused the loan because they are basing the "assumed" value on some blue-book for manufactured homes. They are giving no consideration to the additional improvements on the property or the area where it is located. They are basing the value solely on the original home value, minus depreciation, plus the land value. This just burns my biscuits I can tell you.
This isn’t a little trailer in a park. It is affixed to the land by deed, there are no titles, the seller is paying hefty real estate taxes on the home, and the lenders are looking at it like it is a piece of trash. What they have done is essentially render this property, and many like it, unsalable in our area. Short of a cash buyer or the remote possibility of a seller carry, these homes cannot be sold.
So, the lending world is getting its way. They don’t lend unless it is a nice home in a nice suburban neighborhood to a buyer who works in a high paying job somewhere. Fobid you should want a little space around you, some nice views, a quiet setting where you can spread out, have a workshop, and a pet or two. That is an absolute no no. The working guy who wants to do right by his family is left out in the cold as usual. Apparently, only the rich need apply!
Sandra Paulow, Associate Broker, GRI, REALTOR®
Serving Pinetop & The White Mountains of Arizona
928.242.0300
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