Banker helps single mom buy a West Haven condominium
Mortgage banker: Terry T. Terzakis
Property type: Condominium in West Haven
Purchase price: $224,100
Loan amount: $216,256 Appraised value: $225,000 Loan type: FHA Mortgage Background: A home buyer recently contacted Terzakis to be pre-approved for a mortgage. Her financial profile limited her to applying for an Federal Housing Administration mortgage due to some derogatory marks on her credit report.
The FHA program is a bit more forgiving against past credit blemishes versus most conventional loan programs. As a single mother, she was interested in purchasing a condominium for her and her daughter so as to avoid the worry and expense of maintaining a house and a yard.
Her challenge became trying to find a condominium complex that was FHA approved. FHA must approve the entire condominium complex in order to obtain a new FHA mortgage.
In her target city of West Haven, unfortunately, there are very few condo complexes that are currently FHA approved.
As the buyer viewed several condos for sale she began to get discouraged as nothing was meeting her needs and her wants in a new home until she came across one she felt was just perfect. But once she looked up the complex on the FHA website, she saw it was not an approved complex so she assumed she would not be able to purchase this unit.
When discussing this property with Terzakis, he looked up the listing to discover it was a HUDowned condo. A HUD-owned property is one in which the previous owner defaulted on an FHA mortgage and HUD takes ownership through foreclosure.
In this instance where HUD owns the condo, they do not require the condominium complex to have current FHA approval in order for a new buyer to obtain a new FHA mortgage.
Terzakis explained to his buyer that not only would she be able to get an FHA mortgage for this particular unit, but also that HUD has a financing incentive allowing the buyer to waive the typical 3.5 percent down payment and instead she would only need $100 for her down payment.
Additionally, she could ask HUD to pay up to 3 percent of the purchase price toward her closing costs. She submitted an offer for $224,100 with 3 percent back for closing costs and her bid was accepted.
Within about a month’s time, this new homeowner and her daughter closed on their new home and have settled in only needing about $1,000 out of pocket to complete the entire transaction.
She was able to use the money she had initially set aside for her down payment to spruce up the condo and truly make it a home where she can raise her daughter.