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VA Loan with property issues
What happens if you are in the VA loan process and the property has issues and you can’t close? Can you just find another with the same price or less? Or does that mean you would have to file for court approval again?
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4 Replies
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You can fix the property so it passes VA appraisal or need to purchase a different property similar in price so you meet debt to income ratio guidelines.
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In my opinion, it is a good idea to get with both agents to make sure they know what they are doing and what to look for in a VA or FHA transaction. Cash-out or purchase.
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These type of problems happy often.
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In the context of VA loans, if the buyer is unable to close due to the condition of the subject property, several alternatives can be taken:
Consider Requiring Repairs: The seller could agree to do whatever is required to comply with VA’s Minimum Property Requirements (MPRs). After the specified repairs have been made, the property can be inspected again.
Consider Negotiating for a Loss: Given the federal regulations that need to be met, a reasonable price decrease for the house can be made. This will minimize the need to carry out Mass Rehabilitation on the house.
Seek Another Property: If the issues are too critical or the seller is unwilling to make changes, you may search for another property within your price Range. The new subject property will then undergo the VA appraisal and inspection process.
Simply Abandon: If all the attempts to rectify the war are failures or focusing on sourcing a better alternative in the form of property, opt such that you can neglect the deal from the get-go. There won’t be any need to go to the court for it, but you may lose your earnest money deposit.