NO FHA FINANCING ALLOWED ON PURCHASE CONTRACTS - Thoughts?

By
Mortgage and Lending with The Mortgage Network NMLS#244003 LMB#100008914

I have a borrower who was interested in a home here in Denver, CO. He instructed his buyer's agent to put in an offer, and the agent called the seller's agent to discuss.

As soon as the seller's agent found out that the buyer had FHA financing, she immedietely said the offer would be turned down. Her reasoning has been what I have heard for years. There was a buyer in place, and they wasted the seller's time, because the loan did not go through.

When the buyer's agent ran comps on the property, the asking price, which was non-negotiable, seemed to be priced on the high side.

From a finance standpoint to me, it would seem that a low appraisal would kill this purchase loan with FHA financing in place, because of the low down payment.

My question is this, and it is definetely not to point the finger at anyone, but I am really trying to find out why FHA financing is not allowed on purchase contracts every now and again.

Is the seller's agent wanting the 20% down conventional buyer to come to the table, so they can absorb a low appraisal and still save the deal?

Personally, every qualified buyer derserves home ownership, whatever type of financing they choose to proceed with.

It is the Loan Officer's job to qualify the buyer, deliver the loan committment on time, and make sure the closing goes off without any problems, however is the intended dis-qualification of an FHA loan, part of a bigger agenda to manipulate the market conditions, or is it personal experience that FHA loans are not a solid form of financing, and to avoid them.

Again, this is not intended as a smear towards anyone, I am just trying to understand why FHA is not allowed on some purchase contracts.

Is this seller agent choice? Seller Choice?

 

Posted by
Brian Paul Quigley
THE MORTGAGE NETWORK
Senior Mortgage Consultant, MBA
600 South Cherry Street, Suite 143
Denver, CO 80246
720 524 3215 - Office
720 949 5630 - Cell
303 547 3382 - Fax
www.brianquigley.com http://www.brianquigley.com/>
"When Service Matters"

Personal NMLS#244003
CO License #LMB100008914
Superior Service Since 1985, Serving Colorado, New Mexico and Southwestern Florida
Colorado mortgage brokers license number 100024777
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