First-Time FHA Buyer in Detroit Facing $25K Shortfall—Need Urgent Help & Ideas

[Dean Hendricks]

Hello everyone,

I’m really hoping to get some guidance from experienced homebuyers, investors, and real estate pros in the Detroit area (or beyond!). Here’s my situation:

Property & Loan Details

• First Home + Investment Potential: This will be both my primary residence and an investment property once renovations are complete.
• Purchase & Renovation Costs:
  • Purchase Price: $100,000
  • Estimated Repairs: $150,000
  • Contingency Budget: $15,000
  • Total: $265,000
• Appraisal: Post-renovation, the property is appraised at around $360,000—so there’s potential equity, but it doesn’t help me with the immediate cash I need.
• FHA Loan: My interest rate is around 7%. I have poor credit, which has limited my loan options.
• Closing Costs: Roughly $22,000, covering prepaid taxes, mortgage insurance, lender fees, and HUD consultant fees.

The Shortfall: $25,000

Initially, I planned to use a down payment assistance program in Detroit, but due to misinformation, it turns out I’m not eligible. Now I’m left scrambling to find an additional $25K within about 8 days. Otherwise, the deal (and all my earnest money/inspection costs) falls through.

Money Spent So Far

• Earnest Money Deposit: $1,500
• Appraisal: $750
• Inspections: $1,050
• Survey: $580

I’ve invested a fair amount already, and I really don’t want to lose this opportunity.

Financial Snapshot

• Monthly Income: $4,500 (increasing to $6,000 by March).
• Monthly Expenses: About $2,000 total, including $1,000 rent (which I won’t have once I move in).
• Future Income: By June, I expect even more significant income from my business ventures.
• Debt-to-Income: Not too high right now, but my credit score is poor, so that limits quick loans or credit card solutions.

Condition of the Property

• Full Rehab Needed: The house currently isn’t livable without major repairs.
• Seller Won’t Negotiate: I’ve already asked for an extension and concessions, but the seller is unwilling to help or budge on anything.

Attempts So Far

• Friends & Family: No one can cover $25K.
• Down Payment Assistance Programs: I’ve tried multiple; none seem to fit.
• Co-Signer: Already have a co-signer on the mortgage.
• Personal Loans / Credit Cards: With my credit score, interest rates are brutal, and I'm worried about jeopardizing my FHA approval.
• Extensions: We’ve already pushed the closing date back by a month.

What I’m Looking For

• Creative Financing: Any reputable local lenders, credit unions, or community programs in Detroit that specialize in these types of last-minute shortfalls for buyers with less-than-ideal credit?
• Short-Term Loan Options: Something that won't blow up my DTI right before closing or sink me with insane interest.
• Hard Money or Bridge Loans?: I know they’re high-interest, but with future income coming, it might be feasible if the terms aren’t too extreme.
• Renegotiating Terms: Is there a way to leverage the future equity (post-rehab value of $360K) without messing up my FHA terms?

Why This Property Matters

• Investment & Equity Potential: Post-renovation appraisal of $360K is significant. This could be a game-changer for me financially in the long run.
• Primary Residence: I plan to live there, so I’m especially motivated to make this work and stop paying rent.

Please Help!

If you've faced a similar eleventh-hour shortfall on an FHA rehab or 203(k) loan (or any major renovation loan) in the Detroit area, how did you bridge the gap? I’m open to any strategies—private lending, local grants I might have missed, or even unconventional solutions. This opportunity means a lot to me, and I’d appreciate any leads, advice, or success stories.

Thank you so much in advance for reading and chiming in. I’m really hoping someone here can point me in the right direction!

(Feel free to message me directly if you prefer. Thanks again!)