Turns out the previous owner who was long deceased somehow received a loan from the department of public assistance (obviously an expired program) against the house.

In my personal experience I've called the asset manager to explain that I have a buyer who qualifies for a little bit les than the 10-15% net and they have told me that they will reduce the price to match my buyer's pre-qualification so that the offer can be approved.

If you become a paid member on here for PRO on BP there is a program that does something similar for valuation although it does not have near the functions that this program has.

I've taught high school economics for 11 years and labored through a couple of grad school programs, most recently an MS in finance that I'll finish up this year.Outside of being a homeowner (and a partial owner of family land) I am new to real estate investing.

-I'm approved for financing that requires 25% down, therefore I am financing the rehab costs.

What effect does that have on whether or not they approve the loan?

Make sure you don't by an expensive software program to do this.There are products sold based on saving mortgage payers thousands of dollars.All you have to do is what Steve said above...and it is free!

I have seen some lenders do one of two things: approve the Land contract but hold the seller totally responsible for the mortage.

As soon as you get the chance, I'd get a pre-approval letter so you know what you're able to work with.

I saw a great write up about BP on another blog that was discussing RE programs you have to pay for in Houston, ie, Lifestyles Unlimited.