no stove/kitchen/cabinet=no loan to buy the house???

**johnreal** · 01-28-2010, 08:34 AM

Hi everyone,

Just visited a single family home. Was a reo/repo. But now listen to this: the agent told me that as the house needed a kitchen to be installed and that as there was no carpet on the floor of the living room (the whole living room and kitchen area needed to be carpeted), this particular property could only be bought cash, as no bank would grant a loan for such a property that needed improvements, even such minor ones. And that as a result of this, the house was being sold at a solid discount as buyers buying cash are nearly impossible to find.

Is that really possible?

Thanks for your help!!!

**BoiseRealEstateSoup** · 01-29-2010, 08:10 AM

It's very possible. VA would definitely not loan on it, FHA wont, and I cant see a private lender giving money out for a home that doesn't have a kitchen or flooring either.

**MichaelSothebys** · 01-29-2010, 02:22 PM

It really depends regarding the details of the kitchen. If it is just the refrigerator and a few minor appliances missing I have been able to get around that. In one case where the cabinets, the counter-tops etc are missing typically it is not even a construction loan. It is considered uninhabitable by the bank therefore not loanable. I did have an instance where this was the case. We found that the buyer had a longterm relationship through his business with a local banker. The bank did loan the money, the kitchen was put in and the short term loan was rolled in to a 30 yr fixed after about 90 days. Basically the buyer got a $475K property for $270K put sweat equity and about $25K into it and came out pretty good. Every deal is different. This was a fantastically creative way to solve a problem a buyer had.

**malcolmjohnston** · 01-29-2010, 04:08 PM

Financial institutions are very apprehensive about lending for properties that could potentially be a sink-hole for money.
Your scenario is altogether possible.

**Greg** · 01-30-2010, 05:14 AM

If you shop around you can find a lender who will do a re-hab loan where they give you the money to fix it up. You will have to talk to a lot of lenders to find one, but they are there, I just did one.