How FHA and VA Financing Affects Your Offer
FHA and VA loans are different from conventional loans in many ways. In Hawaii the huge VA limit allows military people to buy homes for up to about $783k with zero money down. FHA allows borrowers with little money or poor credit to qualify for a loan that they normally would never get. However, these loans come with some other problems that you should be aware of as a buyer.
Extra Costs for the Seller Extra Costs to the Seller
The seller in a VA or FHA purchase may be required to pay some additional fees. Depending on the amount of the sale, the seller could be looking at thousands of dollars in additional fees. It can help in these cases to ask the lender, your mortgage broker, to pay these fees on behalf of the seller. Even the listing agent can pay them.
If you can’t figure out a way to have someone other than the seller pay these fees, consider offering an amount that would make the seller willing to pay them. These fees are called “non-allowables” because you as the buyer are not allowed to pay them. Yes the VA and FHA have stupid rules, but you get to borrow money that may otherwise be unavailable, so we deal with it.
VA and FHA Appraisals
Home appraisals on FHA and VA loans are different than coventional loan appraisals, and most appraisers in Hawaii will charge you more for the FHA or VA appraisal. The appraiser is require to do more research and provide more paperwork, and I’ve found that they tend to charge around $100 more because of these things.
FHA and VA also have requirements for properties, so not every property will even qualify for these loans. Especically with a condo or townhouse project, the FHA and VA must approve every project, so if no unit has ever sold there with an FHA or VA loan, your lender will have to go through the process of getting them approved.