Gifts for Buyers Can Work on an FHA Mortgage
A little short on closing costs or some repair items have come up the home inspection that should be seller repairs.
Gift funds are allowed on FHA Loans, you just need a creative lender, great Realtor, and sellers that are ready to create a WIN/WIN situation...
Back in May I wrote a blog about Gifts for Buyers coming from the sellers. I had a young couple that were trying to buy a home. There were some issues that came up in the inspection that would have affected the purchase of the home especially if they were addressed as inspection related issues.
To overcome this we attempted to get a seller paid closing costs addendum into the contract so that the buyers could keep their cash reserves to handle the repairs and not add additional burden to the mortgage.
Well, this past Monday we closed on the property, the funds, $10,000, were applied to the closing costs and now there are new first time buyers with the extra cash they will need to fix the house.
The largest item was a stand alone detached garage that was infected with bugs. When the appraiser came through, they flagged the garage for chipped paint and would not allow the transaction to close until the paint had been scrapped and the garage repainted.
As the property was a probate issue, the sellers were not going to do anything. My buyers got permission from the sellers to go in, scrape the place and repaint it, being careful to not leave any paint chips on the ground.
The appraiser went back, passed the garage and we were able to close. Once the new owners are settled in they will use that $10,000 to tear down the garage and replace it with one that will be insect free.
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