Loan on a home between 500-600 square feet

[Peter Lysiak]

Has anyone put a mortgage on a home that's between 500-600 square feet? If so, can you provide a recommendation?

It's an SFR in South Carolina and I've got it UA off-market. Numbers are great with a lot of value-add potential, however, I'm running into an issue finding a lender. The last two lenders said 675 square feet is their minimum. Thanks!

[Alex Bekeza]

@Peter Lysiak A very common lending guideline I see on the non Fannie/Freddie side of things is a minimum 700 or 750 square foot requirement for detached units (SFRs) or 500 minimum square footage for attached units (duplex at 1,000 total for example). 

I'm actually working on a refinance RIGHT NOW of a little 612 square foot home in Saint Louis Missouri.  I was able to get an exception to proceed from the underwriter based on the following compensating factors:

-The size of the home was common in the market and therefore didn't affect marketability (we had 5 or so comps that we're nearly identical)

-The borrower owned many properties in the area and had strong FICO/Assets

-The borrower was willing to take less than the max LTV (5% reduction due to size risk)

If you have plenty of comps to support this small property type and other compensating factors then there should be a home for it somewhere.  Happy to have my team take a look if you'd like. (assuming minimum $100,000)