Posted on: 16th Oct, 2012 10:12 am
My wife and I were trying to purchase a farm with an older home (built 1938), which we planned to update and move to as our permanent residence. We were approved through a local credit union at 20% down on a purchase price of 165k. The home is served by a water well on an adjacent property (formerly part of the old homestead). The seller wrote into the contract to provide a 5k allowance to go towards either a new well on the property or the recondition of 1 of 2 existing wells on the property. In addition, the seller had a written agreement from the adjacent property landowner to continue using their well for 6 months.
The underwriter denied the loan due to the use of the well on the adjacent property and the need for a new well, something "renting well water" being prohibited, although it was not real clear on why this was an issue. Even the loan officer was not really able to explain the reason for the denial very well (no pun intended). The formal letter we received just stated "Unacceptable Property".
I wanted to find out if anybody else had run into a similar issue or if there were any other possible loan options we could look into.
The underwriter denied the loan due to the use of the well on the adjacent property and the need for a new well, something "renting well water" being prohibited, although it was not real clear on why this was an issue. Even the loan officer was not really able to explain the reason for the denial very well (no pun intended). The formal letter we received just stated "Unacceptable Property".
I wanted to find out if anybody else had run into a similar issue or if there were any other possible loan options we could look into.
Hi brad,
You can look out for private loans on such a property. But it should also be remembered that such loans come at a very high interest rate.
Thanks
You can look out for private loans on such a property. But it should also be remembered that such loans come at a very high interest rate.
Thanks