I have been working on an REO property (Fannie Mae). We had an offer accepted and have been going through the financing. The intention for this house is to fix and flip. This house was a foreclosure, and really needs about 90% cosmetic work, 10% structural (new roof, one significant wall repair).
However, we hit a snag with the appraisal and the lending.
Going traditional stated income lending on this one, as the rate is only 9.3% with no points, and no prepay penalty. Except, the appraisal came in with fair condition. Banks won't lend unless a property is rated average or better, unless we were doing a rehab loan. So, right now we are going to try to get into the property to do the few things required to get it up to average. This includes getting rid of debris from the previous owner (which was done by Fannie Mae after the appraisal), and some general cleanup.
The crux is that there are no utilities turned on. Hard to clean without water, right?
We will work it out somehow. This is really a nice house, and will be great fixed up.
