A New Contender and FHA Fails

Since our dream home is taking absolutely forever to come through, we’ve been looking at other houses. Yes, we’re cheating on our dream home. But hey, we can’t afford to rent forever.

We’ve found another contender. House #2 has several hundred extra square feet. A 1980s split level, it makes up for its dated style with a sprawling floor plan that includes 5 potential bedrooms, 3 full bathrooms, and an extra den. PLENTY of room to grow (in fact, I’m not even sure I have enough furniture to fill it).

The problem is that House #2 isn’t in the same area. It’s in our less-preferred location: a school district that isn’t as good as the dream home, a neighborhood that’s older and not as well maintained. The neighborhood is also home to a gang of miscreants who seem to get their jollies by throwing rocks through windows, as evidenced by the THREE broken windows in House #2.

The broken windows bring us to another problem: House #2 doesn’t meet FHA standards. In order to get an FHA mortgage -- which is what we need because FHA mortgages let you put down 3.5% instead of 20% -- the house has to meet a list of minimum requirements. Among those requirements is “no broken windows”. Whoops.

Another FHA fail: House #2 has no stove. FHA requires that the house have a functioning stove. Oddly, the house does not need to have a fridge in order to qualify for FHA. For some archaic real estate reason, a fridge is considered personal property, but a stove is considered part of the house. (Personally, I’ve lived without a stove with minimal problems, but I don’t think I could go without a fridge.)

And the final problem: House #2 is a Fannie Mae property, but it’s way overpriced. Considering the amount of work it needs just to meet basic FHA requirements, there’s no way it could possibly appraise for what they’re asking.

So House #2 is massive, but needs work and isn’t in world’s best neighborhood.

The dream home is sizeable, needs very little work, and is in a gorgeous neighborhood.

We still offered on House #2. Will let you know what happens!