Need Assistance with FHA vs USDA Loan - Selling 2nd Flip

[Account Closed]

Calling all loan officers:

I am not sure if anybody can assist me, but I am going to take a shot. We completed our 2nd flip in March and received a full price offer within 5 days. Originally, the buyer was doing a VA loan, but the day after the loan was supposed to close, we were told she did not fit VA guidelines (The reason was not given but we were told it had nothing to do with her credit.) Her loan officer then changed it to an FHA loan and we signed a 30 day extension. I immediately asked if 2 appraisals would be required because the contract was signed in less then 180 days and we are selling it for more then 100% profit. We were told only 1 was going to be required. We were supposed to close tomorrow and now we are being told a 2nd appraisal is required. The loan officer now wants us to sign a new contract on Tuesday because the 180 days is up. In this case, she said a new FHA case number will be assigned. My questions are: 1) Does this make sense that a new case number will be assigned? My understanding is the case number follows the property. 2) Couldn't the lender still require a 2nd appraisal since they can obviously see what the loan officer is trying to do? (It is taking 3 - 4 weeks to get appraisals in Fayetteville NC right now. 3) Can the same appraisal be used with a new FHA case number? 4) If they change to a USDA loan, can the appraisal be used and if so, how long is USDA taking right now to review their loans? This has been a nightmare and we really do not want to relist the property since we are so far into the game, but may need to wash our hands of the deal and take our chances with a new buyer \ contract. Obviously, we want and need to close asap. Any suggestions?????? Thank you in advance for your assistance.

[Chris Mason]

@Account Closed -

You can call BS and escalate to management all you want, it's not going to trump FHA guidelines that this loan officer did not know particularly well.

@Everyone and the lurkers -

For your flips, save your selves a headache and only accept FHA/VA/USDA offers if the loan officer you speak to gives you absolute confidence that she or he knows their FHA/VA/USDA stuff well. If you don't have that confidence, take the lower offer that is conventional and at least 5% down. After you're done paying your hard money interest rate, and missing out on other opportunities because your capital is tied up in this property you wanted to have sold 2 months ago, the 'lower' offer could very well net you more money by keeping you out of the situation Melinda is in.

Melinda actually did the right thing by making the loan officer aware of everything up front. I've got a deal right now with a seller super motivated by speed, by contrast, that hid things from me and it wasted three weeks. As soon as it became obvious that she knew more about flipping and the accompanying rules than the loan officer, that was the time to back out or at least get a commitment from the LO to triple check guidelines and get back to her before signing the contract.