Since we are moving, my daughter, who has been living with us for the past year and a half, is in the market for a home of her own.
The problem? Tiny budget.
Recently she heard about a HUD program which allows for buyers who intend to live in the property to have the first 10 days on the market. That 10 day period is for owner occupied buyers only, and investors cannot bid on the house.
Sounds like a great deal, right? My daughter thought so, too. Until she found out that most of those homes are foreclosures and they are accepting "cash only" bids.
Now, is it just me, or does this seem like a twisted manipulation of the program? How many buyers in those lower ranges who intend to live in the home actually have the cash to buy it outright? It seems like the intention of the cash only clause is to pretty much make it so only investors can buy the property.
So am I misunderstanding the program, or is this about what it is?
Tomatoqueen, I don't have any information re the program you referrenced although I have heard of the 10 day rule. Obviously, if the ultimate requirement is cash only ~ that would negate most offers by first-time FHA buyers. Color me confused and, myself, I wouldn't even bother to look into such misleading offers.
As I have posted before, I really think your dd and her dh should be looking into a six-month rental (with the possibility for extension) instead of looking to buy right now under an artificial time-line.
They need to take their time buying their first home ~ I hope they do.
I would love for them to stop spending all their time on trying to buy. My daughter is convinced that if they rent, they will never be able to save any money toward buying a house. (for comparable spaces, rent is higher than a mortgage would be). Unfortunately, that means she's not even looking at rentals right now, and the clock is ticking.
Every time I bring up the possibility of renting, I get the same arguments. Meanwhile, we are still selling, we are still moving, and she will have to do so, too.
I've come to the realization that what I can do is be very clear about when she has to be out, and be very clear about what I can offer in the way of assistance.
But the choice is hers. And if she holds on to the idea of buying for too long and gets caught in an even more difficult situation, then I have to let her live with that. (as hard as it is)
Whoa! Are you sure you are working with a Realtor familiar with Foreclosures. If not, get one. HUD "FIRST LOOK initiative programs" ARE NOT "CASH" only!. Rediculous- whoever gave you that info.
Now some foreclosures are "cash only" which means they are not finaceable - i.e bad condition, sinkhole, etc.
I wouldn't lose too much sleep over "trying to find a foreclosure." In our area, bidding wars on foreclosures are driving offer prices over market. Check your market.
You may get a better deal on a short sale...because less interest in waiting out the short sale- 3 to 6 months to close on average. However if the listing price is the "bank Aproved price" may close quicker.
Include traditional listings in your search, and be sure your Realtor is sending you new inventory (listings) everyday.
Check out USDA loans in your area..have to buy outside of designated UDSA map of your city--but worth it zero down! Rates still low, so wouldn't waste too much time buying..shy away from bad roof and any hint of roof problems.This message has been edited. Last edited by: real estate lady,
I can understand your daughter's fear that if they don't buy RIGHT NOW and rent, instead, it might be a long time before they buy once they become accustomed to renting and the urgency to find a new home has passed.
BUT THE TRICK IS NOT TO RENT "COMPARABLE SPACE." Instead, rent the absolute minimum area in a safe location convenient to their work with the goal of saving every nickel toward buying within the next 12 months. In their case, that would mean, at most, a small one bedroom apartment since, if I understand the situation, it is only your dd, her dh and a very small child.
If so, a small one bedroom apartment would be more than enough room for the time being, even if they give the child the bedroom and they use a sofa-sleeper in the LR for themselves. Short-term sacrifice for long-term gain....
I know, Tomatoqueen, only so much you can suggest! It's hard when you have to step back and let others make their own way when you know they might not be making the wisest of choices. But, sometimes people have to learn on their own; all you can do is continue with your plan as you have outlined. It's a good one!
Renting in some areas is more expensive than buying - but a small apartment is a great idea. It gives them the opportunity to live on their own and the incentive to get a bigger place of their own.
It sounds like with their budget they are looking at less desirable properties that are not financeable - as REL mentioned. They need to be working with a buyer's agent who can help them find the best property in a great area. Going FHA is a good option and if the property needs some work both FNMA and FHLMC offer rehab loans. Even FHA has a special loan for home renovations and the more green the renovations the more you can do.
Fun and Info
My daughter had pretty much decided that if they didn't find something this week, they would have to look at rentals.
And her agent took her to a place that will work. So... she put in an offer. The inspection is Saturday and depending on what they find there, the assessment would follow soon afterward.
It's not an ideal property, but it does have potential.
I'm supporting her in her decision. And if she gets the place, I guess I'll be traveling back here to help her with home improvement projects.
Tomato Queen, It is good to know they did not decide they had to have the perfect property right out the gate. It will be good for them to get the experience while young enough for it not to be too much of a burden.
Fun and Info
Public housing is limited to low-income families and individuals. An HA determines your eligibility based on: 1) annual gross income; 2) whether you qualify as elderly, a person with a disability, or as a family; and 3) U.S. citizenship or eligible immigration status. If you are eligible, the HA will check your references to make sure you and your family will be good tenants. HAs will deny admission to any applicant whose habits and practices may be expected to have a detrimental effect on other tenants or on the project's environment.
So what's new with the OP? Did they find a house?
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