What Kind Of Home Can I Buy?

September 2, 2015
Property Type

Many first time home buyers don’t realize that the type of home does matter when it comes down to what loan programs might be available. In the past, I have asked a buyer “are you looking at single family homes?” and they would answer yes even though they were looking to buy a condo, townhome, mobile home, or believe it or not, land. People really don’t know the difference and that is why I am here to let you know there is a difference.

There are several types of homes which include single family, multi-family, townhome, condo, townhome, mobile home (manufactured), and modular. For example, the zero down payment USDA program usually requires that the property be a single family home, townhome, or USDA approved new manufactured home. Recently, I had somebody put a contract in on a property and it turned out to be an existing (not new) double-wide manufactured home and we couldn’t do the financing and she couldn’t understand why and said “it is a single family home.”

You must email your loan officer the property listing sheet and the loan officer needs to follow up with seller or Realtor to determine the type of property and what types of financing are available. Generally, mobile and modular homes are more difficult to finance with little or no down payment. If you are purchasing a condo and you have fair to marginal credit then FHA may be the way to go but you must find a condo unit in an FHA Approved Building. Also, the FHA program offers a low down payment option on multi-unit properties. Townhomes are tricky because they may have association dues like condos do and may be classified as a condo when it comes to mortgage guidelines. You need to ask the Realtor or seller if it is a “true townhome” or is it a condo and explain to them that you have been preapproved for a certain type of loan and your ability to purchase the property will depend upon their answer on property classification.

Nobody wants to write up a purchase contract, start mortgage paperwork, get a home inspection, and order an appraisal which can cost $300-$500 depending upon the loan program, then find out you can’t get approved because the property is not eligible. Please consult your loan officer on what types of homes you can purchase and restrictions before spinning your wheels and creating a lot of frustration for yourself. Please contact Jerry Tribuzio at 847-516-5743 or email dream@firsthomebuyers.net to get pre-approved and know what types of properties you can look at before making an offer on a home.