Property Under Contract and FHA Self Sufficiency Test Failed

[Kris Pisacane]

Hey everyone,

I currently have my first property under contract in Philadelphia. This is a 4 unit property that I am using an FHA loan to purchase with 5% down. The house is set to close this Friday and I just received the appraisal back from the bank. The value of the property appraised over selling price but 75% of the total rents did not cover the PITI which failed the self sufficiency test involved with FHA loans on 3/4 unit properties. There is a 5% conventional loan program available but due to income limits I do not qualify and do not have 20% to put down on the property, 5% is the most I can currently afford. The sellers would not like to go the seller financing route. Me and my realtor attempted to dispute the appraisal as there are comps in the area much higher with comparable square footage. The appraisal dispute did not change the rents on the appraisal. We are in the process of trying to cancel this appraisal and order a new one but I do not know if this will be an option.

The sellers are willing to extend the closing date and I was wondering if there are any other available routes I can utilize to close on the deal. Any tips would be appreciated.

Thanks