How can we buy a house with an FHA loan?
My father is looking for a house to purchase, and has been approved for an FHA loan. The trouble he's having is that every time he finds a house that he likes, it is snatched up by some deep-pocketed investor who comes in waving cash in the listing agent's face. Sometimes a listing is taken within 24 hours of being put into the MLS system. I feel like we cannot compete with buyers who come in either with cash or a conventional loan. It's frustrating, to say the least. How can ordinary people like my father stand a chance at buying a house with an FHA loan in today's market?
- LandlordLv 77 years agoFavorite Answer
He needs to look at homes investors do not want. High money per square foot, nothing to renovate, etc. He is looking for "bargains" and he is not in any position to bargain, as he is finding out the hard way.
- glennLv 77 years ago
I can't tell you how many times someone has come in saying they will pay cash and then it turns out they have a hard time getting it out of the brokerage account or whatever. It still takes them two weeks or more to close because of title search and inspections and such. the seller may not even be able to close faster than a month. The seller gets cash at closing even when you borrow money on a FHA loan- so they get cash either way. Cash buyers generally want to negotiate a lower price.
So if your father offers a good price -doesn't ask for help in closing costs, and has a strong letter from a well respected mortgage company and is willing to close pretty quick - then he stands a very good chance of competing well.
- 7 years ago
No chance at all against cash investors. Most of the investor's are flipping them ... buying low, fixing them up (sometimes they don't even do that) and reselling them.
Maybe talk to a few of the smaller leasing companies to see if they know of owners who want to sell their rental property. Also, scour Craigslist and newspaper ads for FSBO's (for sale by owner). You can still use a FHA loan to buy a home without an agent.
- Silly GooseLv 77 years ago
He does not stand a chance.
Cash buyers are like gold, pure gold.
FHA requires a home to be in perfect working condition.
Not even a broken faucet.
Only solution for your dad to save up more money to at least put 10% down for a conventional mortgage. How old is he. He should have money socked away at his old age.