approved for the loan and move to closing.
Sometimes there are several complicating issues going on at once. For instance, if a buyer is buying a bank foreclosure or short sale while the house is in poor shape. If the house is in bad shape and it’s not a normal sale situation, a regular FHA loan is possibly not the right fit for the borrower. The buyer may want to apply for an FHA rehab loan, which will provide additional funds to repair the issues with the house. Another issue that occasionally arises with an FHA loan is when homes are connected to well water and a septic system. In that situation, FHA requires that the well and septic be a minimum distance apart. If the well and septic are not spaced correctly, the underwriter is not going to approve the loan. I point out to clients with a well and septic that the surveyor is going to have to mark out and find where the well and septic are, and provide that information to underwriting or the loan won’t be approved. In case you’re curious, the well must be at least 50 f t 50 feet away from the septic tank , and the tank must be at least 100 f t 100 feet away from the drain field. You must make sure that there is adequate distance between those items, so the loan can be approved. Similarly, the FHA requires water tests if the borrower is looking to buy a house that uses a private well or a private water system. A water test is something that’s easy to do on your own, and can save a massive amount of time in the underwriting process. You can do the test and then say, “Hey, this test doesn’t look right. We should start thinking about this issue now, even before the professional appraisal begins.” These are just a few of the things that I can tell simply by looking over the MLS sheet or the contract. When I take note of them, I’m going to let the agent know immediately so we can get the issues resolved in a timely manner. This is a much better strategy
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