Our family friend has $150,000 in cash but cannot buy a house.

[Cenddie Alaban]

I was stunned when our family friend told me that she would contribute $100 K in cash towards my purchase of a $250,000 Duplex at Tinley Park, Il. I already made an offer on this Duplex and waiting for the Seller's bank to make their decision on this short sale. How can I insert her money into this transaction? Besides, I'm a newbie and many investors disapproved of this deal the last time I posted it at BP.

A few days later, to save my friend from an unprofitable deal, I ask her to buy a house for herself since she's not into it for profit but to seek a bigger shelter than her condo. Her answer again stunned me, she cannot buy a house she wants because she has no credit, she never owed any one any money her whole life. She has no credit cards nor credit scores.  

My question is; is there a bank or any institution that can lend her money to buy a 200K- 300K house with a  $150K down?

[Andrew Postell]

@Cenddie Alaban there is a lot to your post so I will try to tackle it in pieces.

For the most popular loan types (FHA/Conventional/VA/USDA) these loans are actually regulated by the federal government. So the bank's don't even have a say on these loans. Even with a "manual underwrite" as suggested above, that is only for those federal loans and it would be very difficult to gain approval.

There are other loan types though. For simplicity I will refer to these as "portfolio" loans. A portfolio loan is a loan type that comes from the bank's own money. Their own portfolio of money...so FHA/Fannie Mae/etc have no say...it's just up to the bank itself on how to lend that money. And there are options for your friend in that realm but you have to find the right lender.

1. Start Small - the smaller the bank the better.  A large bank will not grant you access to their portfolio loans without considerable assets with them (Chase, for example, requires $250k minimum to just see their portfolio loans).  So we need to call the small banks in the area of the property your friend is seeking.  The smaller the better.
2. Be patient - since each bank will call the shots on their own money that means each bank will decide on how to lend the money differently.  You might need to call ALL the banks in your area to find the right loan for your friend.  Don't be surprised if you call 200 banks...that's not an exaggeration.
3. Investor Networks - it certainly sounds like a "mentor" might be needed in your furture.  But at the least some networking locally.  Other local, real estate investors would have already called 200 banks...and they might know a good option for you.  Search for investor groups in your area.
4. Mortgage Broker - a Mortgage Broker is a person who represents MANY banks.  Find a broker and let them make the 200 calls....chances are they already have!
5. Bigger Pockets - there is an entire section on "lending" in Bigger Pockets.  Finding a loan for your friend might be better suited in that section.  Use the subject line of "Portfolio lender in X area" and then describe the scenario in the post itself.

Well, I hope this wasn't too much information but if you need more then feel free to ask.  Thanks!