Frozen Pipes
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No, this is not a blog all about the world of plumbing, but as it turns out most houses have plumbing for their water and sewage systems (alert the media, right?!). We also happen to live in Minnesota, which is always a fun time around the winter months because it gets below freezing most nights for around 4 months of the year.
It’s also no secret that a lot of vacant houses are on the market right now. Whether they are a bank-owned foreclosure, short sale, or even a retail listing being vacant can lead to a number of problems.
The most common, and almost most damaging, is that if the heat is turned off or stops working for some reason, the pipes in a house can freeze in a matter of hours. When this happens you will often get a lot of water damage unless the water has been turned off already.
I am seeing more and more properties on the market that have been vacated in the winter and have suffered this freezing fate. Some homes are not even made available for showings because the damage is so bad and can be hazardous to a person’s health if mold has started to grow in the affected areas. Unfortunately when this happens, there are only a couple options a buyer has when looking to purchase a freeze-damaged home.
Most FHA and Conventional Loan companies will not close on a loan for a house that does not have properly and fully functioning plumbing, therefore the buyers would need to come up with the cash to pay for the entire house, get a private money lender (not very likely), or use a rehab loan.
There are a few different kinds of rehab loans available for buyers, but the best one for most First Time Home Buyers in MN is the FHA 203(k) loan. This offers the lowest down payment with a good interest rate, and can make your offer attractive to a seller, especially if it’s a foreclosure. Otherwise, you will not get an acceptable appraisal and the deal will be dead before you get to close and move in.
If you need more information on loan programs or the home buying process, please contact me to get started.
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