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FHA approval, but for a $1M home

My situation is unique. I am a podiatrist who makes very good money, but I had a bankruptcy filed in 2009. Hence my credit score is currently 605. I am currently renting in Irvine, but want to buy now before rates go up. I know I can be approved for an FHA loan up to 760K, but the houses I like are in the $1M range. I certainly can afford the mortgage payments and I also have about $60K in down payment. Is there a way I can borrow the rest of the down payment up to $920K from a lender also? What are my options? Do I have to do hard money? Any feedback is greatly appreciated. by sima_s from Irvine, California. Apr 22nd 2013 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

I would think that if you don't have 20% or more to put down, you shouldn't be looking at $1M home.. You had a BK 4 years ago.. certainly you wouldn't want it to happen again... just my opinion, but anyway.. to answer your question.. FHA loan limit for the county your looking to purchase in is the maximum loan amount they will lend.. you can purchase a home for more than that, but you would need the additional cash down, or someone willing to do a 2nd.. with a 605 credit score and a BK 4 years ago, it's highly unlikely there's a lender out there willing to do a 2nd..... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Apr 22nd 2013
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Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions

We can go down to 580 FHA, however we are stuck with the FHA loan limits. There isn't any other way to go above that with FHA. Unfortunately I don't think you have any options with a score of 605 and only $60k down. Even hard money is usually 30% down with very high interest rates. If I can help you within the FHA loan limits please let me know. P: 888-320-7888 - ken@mortgagesforamerica.org - Ken Burrows

Apr 22nd 2013
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Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions

You cant exceed the FHA loan limits.

Apr 22nd 2013
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Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

Hard money will only lend in first position, at 60% to 65% of purchase price. Locate an acceptable property that is in foreclosure; use your $60,000 to cure the loan arrearages, and take the property subject to the existing loan(s). Contact me for a list of such properties.

Apr 22nd 2013
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Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

Anything above the FHA loan limit is borne is what the borrower would have to bring to close. The other option is find either a Portfolio lender, a company that uses their own money and underwriting, but the generally want fico at least at a 640. The bigger question is why is your score so low? If the BK was that long ago then I suggest you just work on getting your score up which is probably easier to do than a find a lender that will go to that low of a fico.

Apr 22nd 2013
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Charlie Sparks (CharlieSparks)
#9 ranked lender in New Mexico - 400 contributions

You can always put more down so you can get to the FHA loan limit but the only way to borrow the down payment is if it is secured by an asset you already own, i.e. another piece of real estate, vehicles, retirement account, etc. Then that debt will need to be factored in to your debt ratio. Very tricky to do, especially for the amount you need. If you can get your score to a 620 or more there will be more and better options than FHA. I would recommend working with a reputable LOCAL credit repair firm to see if they can help with this.

Apr 22nd 2013
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Raymond Denton (Raymond)
#11 ranked lender in Ohio - 224 contributions

I think your options are a lease/purchase, or for the owner to carry back a second, but they may not work well for you because we're in a Sellers market in Irvine now. Prime Lending bank has some interesting Portfolio programs, but the minimum FICO is 620 for those. Are you carrying balances on your credit cards? If "yes", paying them off could increase your FICO scores.

Apr 22nd 2013
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Yoni Rappaport (YoniRappaport)
#103 ranked lender in New York - 13 contributions

There are banks that will lend above FHA limits but will want the credit score to be higher than 605. My suggestion for you is to go to someone that does credit repair and maybe they can bring your score up and then your options will be better. I can recommend some companies if you want.

Apr 22nd 2013
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Joe Metzler (JoeMetzler)
#18 ranked lender in Minnesota - 3,986 contributions

Can't go FHA... Loan amount is above the FHA Loan limit. Scores are too low for any conventional type loan. Looks like finding a private hard money lender or waiting awhile longer are your only options.

Apr 22nd 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

You will only be able to go to FHA limit. You will need to address your credit scores, why is your score 605? have you re-established credit? If you have had any lates on your credit since the bk you will most likely not be approved. Speak with a credit professional and work on your scores. Also , you say you filed in 2009, when was it discharged?

Apr 22nd 2013
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Carlos Figueira (carlosfigueira)
#108 ranked lender in New Jersey - 199 contributions

Fha has loan limit as others mentioned.....you will need to put more money down or look for lower priced home if you want to purchase at this time and not wait for increased credit scores.

Apr 22nd 2013
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Thanks all for your answers. It looks like everyone agrees I need to raise my credit scores. So if I were to raise my credit scores, I could stil only get up to $760K using FHA?

Apr 22nd 2013
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Carlos Figueira (carlosfigueira)
#108 ranked lender in New Jersey - 199 contributions

Using FHA.....yes, BUT if you increase your credit scores you will have options @ 10% down @ $1,000,000

Apr 22nd 2013
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Bruce Conn (BruceConn)
#277 ranked lender in California - 19 contributions

I'll be odd-man-out: You shouldn't buy a $1,000,000 house. It isn't because of your BK or your credit score - it's because you only have $60,000 to put down and you do not have adequate cash reserves to consider this a safe move." Even if you stay within the FHA limits, you would have combined monthly expenses of over $5,000, none of which is principal - just raw dollar expenses for interest, insurance, property taxes, and HOA. You can use your own imagination to tally up wear and tear; repairs and replacement; and personal upgrades and purchases. All out-of-pocket, all due every month, month after month...Consider these options: 1. Downsize your search to a price range you can enter without "looking outside the financing box". 2. Think of the lower priced house as temporary; convert it to a rental when the timing is right for a move-up.3. While you wait to buy, invest your money with a proven "flipper" (no, I don't have one to recommend). Nothing like tossing a wet blanket on a complete stranger to warm up on a Monday morning.Bruce ConnCALIFORNIA Equity & Loan

Apr 22nd 2013
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Raymond Denton (Raymond)
#11 ranked lender in Ohio - 224 contributions

>>if I were to raise my credit scores, I could stil only get up to $760K using FHA?No - you can exceed that limit if the Seller carries back a Second.

Apr 22nd 2013
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Robert Hanson (rhanson)
#38 ranked lender in Maryland - 646 contributions

FHA Loan limits are now also now being reduced to $625k in highest income areas. Lowest rates. Best Service. 20 years experience in the industry. I am always happy to assist so if you need more information, a pre-qualification, or a competing rate quote you can go to my web page and use my live support button to discuss anything at all with me in an easier format. Web Address is: http://www.loansfromrob.com/quote/ Email is rhanson@gladewaternational.com and direct phone is 240-752-7549. Good Luck -- Rob Hanson

Dec 10th 2013
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