All Forum Posts by: Renee Ward

Interesting. My understanding was that you needed to go through the original servicer of the loan and qualify with the original terms to assume that previous loan. 

Your son's realtor found a different bank that was willing to originate a new loan at the original terms/interest rate? 

Any clarity would be much appreciated :) Thank you!

With interest rates continuing to make headlines, assuming an FHA or a VA loan at potentially sub 3% is increasingly attractive.

I've set up search parameters in MLS to be able to see these pop up in Northern Nevada as soon as they hit the market, and then run analysis on them assuming someone moved in for at least a year and then moved out to see how they'd perform as rentals.

You can also do this in Zillow by having a keyword search for "assumable", "FHA", "VA", etc. The advantage to MLS is being able to see properties where the listing agent inputs this in the "Private Remarks", which Zillow and other online sites do not display. 

However, I've talked to many agents in the area (Reno, NV specifically), and have only found one agent who has helped a client successfully assume an FHA loan. He said the entire process took about 45 days which is not an extraordinary amount of time. 

I'm aware that someone would need to come up with the delta of the purchase price vs. the loan balance (ex: FHA loan at 3.25%, $350K remaining - Purchase Price: $500K, buyer would need to come up w/ the $150K difference).

Curious if anyone has successfully done this, and any info is greatly appreciated. Thank you! 

Hello , 

Appraisals are an opinion of value. There is a lot of subjectivity, and two appraisers will value a property differently. With multifamily properties they typically do not use sale comps because the recognize that part of the value is in the revenue the property generates. It is more common for the appraisers to come up with a value using two methods: income approach (based on the lease amounts or their opinion for market rent on vacant units) and cost approach (if you had to re-build the building from scratch).  The property being well maintained will hold minor weight on the opinion.

When you say the value is not that different than it was in 2014, my first though is to ask if rents have increased since then.

The appraisal is for the bank's benefit so they can feel comfortable with their risk backing your loan.  You already have an appraisal at a value needed for the bank to approve your loan, and the numbers still work.  If I were in your shoes, I would move on.

Cheers,
Melissa