Mortgage under $75k... help

My husband and I want to buy a fixer-upper, but we’re having trouble because the price is under $100k. Most lenders we’ve talked to say they won’t do mortgages for less than $100k. Does anyone have ideas on how to get around this? We own some land, but there’s not enough equity for a loan to cover the full amount. We thought about trying for a personal loan, but the rates are high and the amount might be too much for a personal loan. Not sure if a bank would approve that.

Any suggestions we haven’t thought of?

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Any national bank will cover the costs if they exceed the high-cost threshold.

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Wells Fargo will provide financing for amounts under $100K, but the condition of the home could be a concern if it’s a fixer-upper.

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Yeah, it needs a bathroom, and one lender suggested we get under contract with the condition that the bathroom is completed. We would then install the bathroom ourselves before closing on the property. However, he didn’t realize the amount was under $100k, so it didn’t work out.

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My credit union does them under 100k Founders FCU.

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Did you already own the property when you installed the bathroom? Avoid making improvements on a property you don’t own.

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There are several factors that could be influencing this situation.

Have you spoken with a Loan Officer to determine what type of financing you qualify for, especially if it’s over $100k?

Many Non-QM loans (such as bank statement or asset depletion loans) have a minimum loan requirement of $100k.

However, conventional loans like VA, USDA, or other traditional mortgage options can go below $100k. The challenge is that the average cost to originate a loan exceeds $11k, which often makes smaller traditional loans unprofitable for lenders or causes them to fail regulatory fee and interest rate tests.

If you qualify for traditional financing, it’s still possible to find a loan officer or broker willing to work with you, despite these challenges.

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Finding lenders willing to offer mortgages for amounts under $100k can be challenging due to minimum loan requirements. However, you have a few alternatives to consider:

Local Credit Unions or Community Banks: Smaller, local institutions may be more flexible with lower mortgage amounts, especially if you already have a relationship with them. It’s worth reaching out to credit unions or community banks in your area to see if they have more lenient criteria.

FHA 203(k) Loan: If you’re considering a fixer-upper, an FHA 203(k) loan could be a great option. This loan allows you to finance both the home purchase and renovation costs. Since it’s government-backed, lenders may be more open to approving lower loan amounts.

If you find a lender that offers a small mortgage, be sure to compare their rates and terms to ensure you’re getting the best deal. Let me know if you’d like assistance exploring any of these options further.

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Thank you. I’ll explore these options.

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FHA203 is your only realistic option.

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I believe the lowest mortgage loan I closed in the past year was around $68,500, with the home purchase price being $71,000. Who have you contacted so far?

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We’ve contacted two local mortgage lenders and Rocket Mortgage. We haven’t explored credit unions yet, so that might be our next step. I’m thinking banks might not be a good option since my husband is self-employed, and they tend to be stricter with their requirements.

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Consider obtaining a 203k loan to finance the repairs, then pay it down to fall below the threshold. You’ll need to locate a 203k contractor, but your lender likely has a list of approved ones.

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Consider a 203(k) loan or a VA construction loan if you’re a veteran. Another option is to reach out to your local credit union or community bank.

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Consider applying for a construction loan by stating that you’re building a house. While they may not offer a traditional 30-year mortgage, you can secure loans for up to 15 to 20 years.