Got preapproval, found house, now bank won't loan $

   My wife and I have been house hunting for about a year.  Perhaps 6 months
ago, we found a house that met our needs. (4 bedrooms, 2 bathrooms, an acre+
of land, in a location we liked, and unincorporated)  It even had a second
structure on the property that used to be a hair salon, which we thought
would make a nice storage shed, or home office.  It was bank owned, and bank
was asking $65K.  Probably needed about $10k to $15k in repairs.  Long story
short: it had failed to sell, and went to auction.  We were outbid at
auction, because somebody else bid $60k, and we stopped at $59k.  So we
forgot about it.

  Last week, the real estate agent called and told us that the auction deal
fell though - purchasers were unable to complete the deal, so the house was
back on the market.  We had recently redone our preapproval through a local
company affiliated with Wells Fargo, and were approved up to $120k.  Bank is
now asking $59,900 for the place.  Funny thing is, we recently signed our
oldest son up to attend kindergarten at a grade school only 1 mile from this
place, to get him in a better school district.  If we could get it, I'd be
able to put in some work on it after dropping him off at school.

  Anyway, the rep at the mortgage company asked me some questions, and when
I said we'd like to put in an offer, she told me that the zoning could be an
issue.  I had noticed that the property was zoned B-2, business.  The larger
structure is single family, a house built in 1900.  If you zoom WAY in on
the auditor's website, it has the word "residential" right on top of this
house.  It is evidently considered a "non conforming" structure, since it is
residential, and does not fit the business zoning.

  I contacted the county zoning and planning folks, and was told that I
could either, A) buy it and use the house for our family, and get a simple
certificate if I wanted to use the smaller structure as a business  or
B) I could get the place rezoned as residential without very much trouble.
It would take 3 months and a few hundred dollars

  The mortgage rep contacted Wells Fargo, but they told me they could not
provide a loan for us to get this property.  The main argument was that due
to the current zoning, if the "non conforming" house was damaged more than
50%, we would not be allowed to rebuild it.  Evidently this is because over
time, they want the property to be fully a business zone there, since that
is what the zoning is.

  I'm not sure why this is really an issue, since the zoning folks told us
it would be a simple manner to either use it as is currently, or else rezone
it residential.  Plus, wouldn't the insurance on the place cover the
mortgage if an tornado or file screwed up the place?  The land itself is
probably worth $25k to $30k, because it is a nice location at an
intersection with decent traffic, and would probably be a good place
eventually for a Dairy Queen, Subway, or whatever.  There are lots of $150k
to $250k houses going in just to the north, and most of the surrounding area
is agricultural fields.

  I'm wondering if there is another way we need to be going about this.  We
were planning on getting an FHA 203k rehab loan, and rolling the repairs
into the loan.  We have about $6k of our own $ to put towards the loan.
Total cost of the property is about 10x that.  Anyone have any suggestions?

  My wife would truly love it if we could somehow get this place.  Her
commute would be only about 14 minutes, and would be along the most scenic
limited access highway in the area.  Plus, she'd be facing away from the sun
in the morning, and away from it again in the evening.  We would live in the
are where our son is already going to be going to school, so I would no
longer have to drive him to and fro - the bus could pick him up.

  If anyone has any thoughts that might help us figure out how to get around
the apparent hurdles here, we would really appreciate it.  We are tired of
looking, thought we had financing lined up, and THOUGHT we finally had a
nice place to get with the financing that has, evidently, evaporated.
Thanks!

 
  [ ... ]


  [ ... ]

Apply for a mortgage with the bank wanting to sell the property, and
proceed with the zoning change--or make it contingent on the zoning
change being approved.


Gary

--
Gary Heston  gheston@hiwaay.net   http://www.thebreastcancersite.com/

Life has its' ups and downs. Prepare for the downs during the ups.

 



So go to the bank of Mom and Dad.
If your parents have a large nest egg saved up for
retirement, they are not getting much more that 2%
intrest on their money (based on current CD rates).
You can pay them 4.26% (IRS guidelines).  It would
be a win/win situation.  You get a better intrest rate
and they get a higher return and a monthly income
thanks to your monthly mortgage payment.

 

OhioGuy wrote:


we found a house that met our needs. (4

needed about $10k to $15k in repairs.

approved up to $120k.  Bank is now asking

attend kindergarten at a grade school

could get it, I'd be able to put in some

said we'd like to put in an offer, she

you zoom WAY in on the auditor's website,

trouble. It would take 3 months and a

is because over time, they want the

itself is probably worth $25k to $30k,

lots of $150k to $250k houses going in

towards the loan. Total cost of the property

Tell the realtor that you will buy it when they get it rezoned
because you cant borrow for it with the current zoning.

See if any other lender is prepared to lend on that property.


of looking, thought we had financing

that has, evidently, evaporated. Thanks!