FHA No-No

To quote Professor Pippington’s blog, “Whiskey, Tango, Foxtrot!” This emotional outburst was in response to a listing for which the description stated that no VA buyers would be considered. FHA buyers, on the other hand, were apparently cool.

I might be able to rationalize this, even if it does smack of being anti-American. With VA financing, there is a laundry list of “non-allowables” or, in English, fees which the buyer in a typical transaction would customarily pay yet in the case of VA are required of the seller. These are generally smaller fees with one exception — the buyer’s share of the escrow fee.

I saw something this morning which I don’t get, however, no matter how many cups of coffee I ply my slow-starting Friday morning brain with. (And you know I am off to a slow start, because I just ended that sentence with a preposition and was willing to let it ride.)

“VA may be ok at the right price and terms. Seller says no FHA.” Say what? Sounds like someone woke up on the wrong side of the government insured loan bed. Usually, this stuff is money driven, but in this case, it doesn’t add up. Sure, there is a list of “non-allowables” for FHA financing also, but the total of the buyer’s customary charges which are awarded to the seller’s side of the balance sheet in the case of FHA financing generally totals a couple of hundred dollars at most. VA financing actually costs the seller more.

Maybe it is the appraisal that this seller fears, but that doesn’t make any more sense. The appraisal processes for VA and FHA loans are very similar, and while all these appraisals involve a slightly higher degree of difficulty, they aren’t  your grandmother’s government sponsored loan appraisals. The horror stories of yore are just that — stories. While the seller may get saddled with providing a new GFI outlet or three, the days of having to rebuild from the studs out to appease the VA or FHA lender are gone.

More to point, if a seller is willing to accept one, why wouldn’t he accept the less-costly cousin as well?

Whatever. So much doesn’t make sense these days. It’s like someone bopped us all with a silly stick. This same listing says, “Fax offers (don’t e-mail anything).” What about if I fill up the tank, drive across town, and present the offer in carbon triplicate? Would that be OK? Do you think if I sent the offer from my computer via a crazy, newfangled technology called the eFax, he could trace my offensive use of eco-friendly tools and disqualify my client?

Better not to take chances. And, I am guessing that electronic signatures are out of the question as well. We wouldn’t want to make this too easy.

TGIF.

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