Dear Jelly: I have a client that wants to purchase a 40K hud home with a 580 fico. Does anyone know of a lender or resource?

Chances are, if the score is that low it is for a reason that will prevent them from getting a home to begin with, such as judgments or bankruptcy, or recent late payments. It’s not just the score we look at, but the whole picture, and the reason that the score is that low is probably why the borrower will not get qualified. Go to your local real estate investment club and find someone who is willing to finance it for them out of their own pocket until they can get their scores up and refinance with a retail lender. There are tons of real estate investment clubs all over Texas that will probably have folks willing to do this one, but their rates are super high.

Dear Jelly: are there any down payment assistance programs for first time buyers if buying a house in dallas?

Yes, you can call Trish Jessie at the Dallas Housing Authority at 214-631-1528 to get more info on the Homeownership Program they offer. The only programs you can really do now are ones that are funded by CDBG’s (Community Development Block Grants), and you must have low enough income to qualify for most of them. Additionally, there is a waiting list or they run out of funds part way through the year sometimes and you have to wait until the next fiscal year rolls around before those funds are replenished. You might also try the Texas First Time Homebuyer Program at this website   http://www.tdhca.state.tx.us/homeownership/fthb/down-payment-assistance.htm

Good luck!

Dear Jelly: What are the costs associated with selling a home?

It depends on what you mean by “home selling costs” and if you mean from the sellers’ or buyers’ perspective.

For the seller:  you have agents fees, any repairs that the appraiser deemed necessary to bring the house up to standards for the lender, and maybe home staging fees if you choose to go that route. You also must provide an Owner’s Title Policy, and if you are smart you would include a $400 home warranty as part of the transaction to prevent headaches from buyers coming back on you trying to get you to pay for broken hot water heaters or whatever, plus the warranties sweeten the pot for them, as well.

For the BUYER:  closing costs can be around $3000+ and then you have your escrowed taxes and insurance which can be another $2000+ and on top of that the buyer needs to come up with the downpayment of 3.5% or more. The seller can offer to pay a portion of the closing costs and this is a better way to sell a house (that is not selling) than it is to drop the price since many people are prevented from getting into a new home due to the amount of closing costs (NOT the home price!), which also include taxes and insurance on top of the downpayment. On FHA, a downpayment can be a gift from a family member (such as a parent liquidating a portion of their 401k), but there must be a strict papertrail proving where the money came from and the exact amount must be taken OUT of their account and put INTO the buyer’s account and the amounts need to match up…yes they are that nit-picky these days.

Dear Jelly: Is market value the same thing as sales price?

No, market value (as stated by an appraiser) and sales value are not always the same. The seller can choose to take less for the home and give the amount between the sales price and the market value for the borrower to use toward closing costs and pre-paids (taxes & insurance) in an amount up to 3% for conventional loans and up to 6% for FHA loans If the seller wants more than the market value, then the borrower would have to pay the difference between market value and and sales price since the lender will only let you borrower a percentage for whatever the market value is (as determined by the appraiser). LTV is 95% for conventional and 96.5% for FHA. For example, if the borrower has a house that is valued at 100,000 and they want to charge 105,000, then the borrower would not only have to come up with their downpayment, but would also have to tack on an extra $5000 to what they put down in order to buy the home.

Dear Jelly: Does anyone do loans for credit below 600 anymore?

It depends not just on the score but also the root causes of what is making the score that low. Usually a score that low is caused by judgments or some other major hicki on the credit report that wil prevent you fom getting qualified. Also, many times with score that low, the only tradelines that are left open are ones that are collections. You have to have at least 3 tradelines open to get a mortgage these days.

Ask Jelly!

You can ask Jelly anything about the mortgage biz and she will tell it like it is. Don’t be shy….this is your chance to ask Jelly! If you’d rather ask via e-mail, send your questions to askjelly@ymail.com