Posted on: 19th Apr, 2010 02:53 pm
i currently own a nice 5 acre parcel of land with a very tiny house that is in terrible condition. my plan was to build a new house and then refinance the whole thing. now i'm finding it almost impossible to get a construction loan without 20-40% down. i am interested in getting a usda rural development loan to provide money to build a new ranch. the location and and my income fully qualify according to their requirements except for one big thing - i cannot currently own a house.
could i sell my house to my parents and then buy it back using the usda loan?
what are my practical options to sell or transfer this property to my parents? (novation? or cash?)
could i sell my house to my parents and then buy it back using the usda loan?
what are my practical options to sell or transfer this property to my parents? (novation? or cash?)
Hi!
Welcome to forums!
If the property is free and clear, then you would be able to transfer the property to your parents and then buy it from them using a USDA loan. However, if there is a mortgage on that property, then you would be liable for paying it off as you sell off the property. But again, if the property is in a bad condition, then you won't be able to get a loan even after you purchase it from your parents.
Sussane
Welcome to forums!
If the property is free and clear, then you would be able to transfer the property to your parents and then buy it from them using a USDA loan. However, if there is a mortgage on that property, then you would be liable for paying it off as you sell off the property. But again, if the property is in a bad condition, then you won't be able to get a loan even after you purchase it from your parents.
Sussane
Thank you for the reply!
I owe half of the assessed value on the property. The house isn't quite falling apart either. I actually have been whipping it back into shape so it can be rented (new drywall, windows, etc. at minimal cost).
Would it be wise to have an independent conservative appraisal done to make sure that it would have good enough value for a mortgage? I can't see this being valued less than 125% even in today's market.
I owe half of the assessed value on the property. The house isn't quite falling apart either. I actually have been whipping it back into shape so it can be rented (new drywall, windows, etc. at minimal cost).
Would it be wise to have an independent conservative appraisal done to make sure that it would have good enough value for a mortgage? I can't see this being valued less than 125% even in today's market.
Hi,
You can go for an independent appraisal in order to know the value of the property. Depending upon the equity that you have in the property, you would be able to get a mortgage.
Thanks
You can go for an independent appraisal in order to know the value of the property. Depending upon the equity that you have in the property, you would be able to get a mortgage.
Thanks
I have joint ownership in 55 acres can I get a usda loan since I have this land. Could I deed my share over to my mother then buy back 5 acres with a usda loan
Hi Calyn,
If you meet all the required criteria of the USDA lender, then you will be able to get a USDA loan and use it to buy the land.
If you meet all the required criteria of the USDA lender, then you will be able to get a USDA loan and use it to buy the land.