Hud Help

[Dwayne Stutzman]

I put a bid on a hud home for $55,000 and they accepted our offer. It was list for $45,000 . I was buying this house for living in. We are using a FHA loan were preapproved for. Now heres were it gets screwed up.

They said back that they couldn't except it know because it was over what they thought it would apraise for. So my lender changed the loan to $46,000 and we resubmited it back. So now their saying we can't change our bid.

And we have to use thefirst bid of $55,000 but we now have to come up with $10,000 to show if it doesn't appraise for the $55,000 to make up the difference. Which we don't have. What I don't get is our lender is the one who does the appraisel on it and I can't believe it won't appraise for that.

Its almost 2000 sqft 4 bedroom 2 full bath 3 car garage and only need scarpet and paint cleaning and thats pretty much it. It sold for $125,000 2 years ago. It,s going to really piss me off if we don't get this house because its a real good deal.

What if anything can I do ? Any suggestions on working with hud? I'm waiting to hear back f rom my lender because he's trying to work it out also.

[Jon Holdman]

You should try to get some local advice, because HUD seems to behave differently in different areas.

I'm a bit confused by what you wrote. I think you're saying your lender is coming back saying they won't do a loan based on the $55K price. Unfortunately, that's not unusual these days. HUD is saying they have an accepted contract with you at $55K, which they do.

Did you put a financing contingency in your offer to HUD? Has the loan commitment deadline passed? If you have the financing contingency and the deadline hasn't passed, you should back out using that as your out.

If you don't have the financing contingency or the deadline has passed, you will either have to go through with the deal or you will lose your earnest money. In our area, HUD is strict, and you WOULD NOT get your EM back if you're past the deadline or did not include the contingency.

If FHA does the appraisal and comes up with a lower value, you're going to be stuck. You'll either have to come up with the cash or walk away.

Welcome to the world of real estate in 2010.