underwriting guidelines for SFR without stove and light fixtures

[Theresa K.]

Looking to make an offer on a Freddie Mac property that does not have a stove and is missing light fixtures in some of the rooms. Would like to get financing if possible. Local credit union will not do the deal because of the repair items. They said it is not habitable per Fannie Mae guidelines. Talked to several people at Wells Fargo. One person said yes, WF would probably finance the property. Anther said no, a stove is required. Another said WF would portfolio the loan - I don't think so. Of course WF wants me to apply for a loan before they can give me a straight answer. I don't want to apply for a loan that won't happen.

Does anyone know if a property will qualify for conventional financing with those repair items? I've heard some lenders will do a repair escrow, but I'm not sure how that works.

Worst case - I pay cash and then do a cash-out refi after the work is done, but I'm not sure I like this property that much.

[Lynn McGeein]

We did one back in 2009 without appliances and some holes in drywall, and to close on it, the mortgage company required the escrow of funds to cover the appliances & repairs, which sounded reasonable. Then it got weird where the mortgage company wanted a re-appraisal showing all appliances & repairs completed before they'd release the escrow, so we had to purchase & install the appliances, fix the walls, and pay for the re-appraisal before we could get our money back out of escrow, and then they tried telling us they would only ok the release of our funds if it went toward the loan balance, even though we already put 25% down. It took several months to get our funds back instead of credited to our loan balance. So make sure you understand any escrow before you agree to it, as it was a pain paying for everything after putting the money in escrow to start with.