SHOW ME THE WAY....THERE MUST BE A WAY...... - Posted by Josh

Posted by Troy M on March 12, 2000 at 12:43:05:

working with any government agency for anything. As a vet, I am reluctant to deal with gov. agencies period. Just my own quirk.

I see your point, I basically assumed the seller would want to see proof from the VA that the loan would not count against him and would want to get another VA loan for his next residence. And we all know what happens when you assume. :slight_smile:

Thanks for shedding light, again.

Troy M

SHOW ME THE WAY…THERE MUST BE A WAY… - Posted by Josh

Posted by Josh on March 11, 2000 at 22:39:51:

I want to buy a property for my personal residence that seller is willing to sell, (buy owner). He has about $2,000 equity and I will assume his loan, pay P.I.T.I. for 2-3 years and then I will sell and re-locate. How can I do this and work around Due on sale clause? Because of that, I can’t use a wrap around or all inclusive I guess and he does not want to Lease/Purcase because he does not want to be on the deed or loan, so he can go get another loan for a new property in another area. It’s a VA loan about 18 mos. old. He said he couldn’t qualify for both.
How can I do this?
Thanks, Josh.

Re: SHOW ME THE WAY…THERE MUST BE A WAY… - Posted by Troy M

Posted by Troy M on March 12, 2000 at 09:11:11:

Josh,
It’s my understanding that the VA actually does allow owners to sell using a ‘contract for deed’. I believe it was Bronchick who relayed this (though I could be wrong, so check it out for yourself). So, if the VA will allow it, you can then show the VA that the property has been sold and the loan should not count against the seller when he tries to qualify for a new loan. (However, he will most likely remain liable for the debt).

Also, the total limit for VA eligibility is somewhere around 270k? (Double check this). This means the balance of the loan on the property you’re buying will be deducted from his eligibility. So, it depends on the current balance of his VA loan and the amount he wants to borrow for his next home. It can be done, but get ready to jump through some hoops. I would suggest looking for another home, preferably with more equity and less hoops.

Good Luck,
Troy M

DOS not the problem - Posted by Bud Branstetter

Posted by Bud Branstetter on March 12, 2000 at 08:53:30:

If the due on sale were the problem you could beat it with land trusts, contract for deed, or L/O. His problem is VA eligibility. He may be eligible for more than he thinks and can have two loans. Get with a good mortgage broker and find out what he can really do if he “rents” to you. He needs to find out his true eligibility. You could always find a house and use a creative technique to get him into it. I don’ know that I would want to be in that mode.

Re: SHOW ME THE WAY…THERE MUST BE A WAY… - Posted by Kevin/MD

Posted by Kevin/MD on March 12, 2000 at 06:50:56:

Hi josh,
Check out the article by William Bronchick,
How to beat the “Due On Sale Clause” in the How To section of this site it may help.
Good luck!!
Kevin.

Re: SHOW ME THE WAY…THERE MUST BE A WAY… - Posted by Redline

Posted by Redline on March 12, 2000 at 24:34:11:

Granted I am no expert, but it seems to me if he insists he must be off the old loan than there’s no way to do this without you putting a new loan on the property in your own name.

Your issue is not the DOS clause because he won’t allow you to ‘assume’ his loan. Your issue is figuring out how to finance this WITHOUT:

a) him keeping the loan in his name and
b) you not applying for a new loan.

I can’t think of anything - maybe someone else can.

RL

Re: SHOW ME THE WAY…THERE MUST BE A WAY… - Posted by chris

Posted by chris on March 12, 2000 at 24:26:54:

Josh-

Read the free articles on this site. Many of them deal with the DOS clause. The seller could show income from your rental of his property when applying for the new loan.

Re: SHOW ME THE WAY…THERE MUST BE A WAY… - Posted by JPiper

Posted by JPiper on March 12, 2000 at 09:46:29:

Good answer.

VA does permit the sale of a property with a contract for deed. BUT, don?t expect to get a uniform answer on this one, because everyone at the VA doesn?t know their own rules. It?s in the VA Guide.

As far as hoops go, what hoops? You do a contract for deed with the seller?.that?s it. You don?t need anyone?s approval. On the strength of that note the seller can apply for a new VA loan with 100% offset against his liability for income purposes. The limit to VA entitlement is the ONLY issue?.but as you said, he would be entitled to up to the VA maximum.

If for some reason this seller was not entitled to another VA loan?..so what? In the market today there are ALL kinds of available loan programs, some of which are 100% financing for people with decent credit. Granted the rate could be higher than with a VA loan?.but what price is this guy willing to pay to get rid of this house???

JPiper