FHA requirements/ house not closing

[Dustin Gott]

I have a property that was supposed to close on July 30th. The lender/underwriter keep coming up with last minute things they need and have delayed closing twice. They have had this in escrow for almost 6 weeks now. Today they came back and asked for our HUD from when I purchased it. I gave them it and now they are saying the cant fund it because we are selling for more than a 20% profit. Why are they telling us this after 6 weeks of having the file???? At what point do I keep the earnest money and give up? What would some of you do? Thanks

[Andy J.]

They are telling you this after 6 weeks of having the file because they are incompetent (a commonality among banking institutions). Even though the lender has had the file for 6 weeks, it likely may not have passed through underwriting until the last week or so before closing. I will assume from your post that your buyers are seeking FHA financing.

I have run into this a couple times here in Colorado. There are only a couple banks here locally that I have found that will fund a deal where you are selling above 120% of purchase price in less than 90 days. You can certainly look around for one of these banks and push your buyers in that direction.

Another option to consider is waiting until after 90 days from purchase at which point the very same bank may approve.

You could always sell the home on a lease/option to your buyers that way they can move in and pay your rent until they can close on the house. Some additional risk involved, but a possibility nonetheless.