Interesting question brought up on my 'Smallest House' post about financing problems on this 'peanut' of a
house (I mean cozy of course). Perrin Cornell brought up a point about lenders having a minimum square footage amount for a property. I had never heard of this but it's better to be proactive right?
I started with email questions to all the lenders that I normally use. My fingers were setting fire to my computer keys!
"The square footage on this house is only 580 are we going to have a problem? Is there such a thing as too small of a house to lend on?"
I can't say that I was amazed at the speed my LO's got back to me (another post). The one friend that can no longer originate in IL (company preference now) got back to me the fastest & he can't even do the loan! The other 'in house' lender moseyed along in 2nd place with another question to my question. The 3rd lender is still MIA on an email answer after 4 days! Hmmmm.
As far as the loan requirements in my area of IL, there is no minimum square footage that Perrin mentioned BUT obviously there is the minimum loan amount for my area which in most cases is $50K to $75K or higher. The one loan officer brought up a good point asking "are there any other houses for comps as this one cannot be the 'exception' for the neighborhood".
Great! Another appraisal requirement that I had never heard about before. Literally, no exceptions!
Any other weird loan requirements for your area?
Is there a minimum square footage requirement for a loan?
8 comments • Lyn Sims - Schaumburg Homes • September 26 2010 10:44AMComments
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This will be interesting to watch, I would not have thought square footage would be an issue for a loan!
Lyn, I never thought that was possible. What does size got to do with it? lol (I had to stop myself)
yeah, like Ellen said-Size shouldn't matter! heehee! But seriously, folks.... the weirdest thing I have heard of a lender attempting to require was when my buyer's lender (not a lender recommended by me) wanted him to pay off his car loan in full the day before closing! AND- it was a company car!
Jennifer: That's just stupid and worth of an award.
Ellen: I didn't even think of that reference, size does matter.
Joan: I didn't think so either but the subject cannot be an exception to the neighborhood. The smallest cracker box in the midst of larger I'm afraid. There are 'small comps' in the area so I'm lucky. Why am I giggling writing 'small comps'. LOL. Ellen's got my mind in the gutter.
Are we still talking about size in terms of square footage LOL, seriously, I have never heard of such a thing. Although with banks acting the way are nowadays I am not surprised by anything they do at this point.
Gerry: Just checking it out to be sure, found out about the appraisal 'exceptions' though.
Lyn, for my LO's I use they told me that it's the dollar amount not the size. Now to build a new home...size is a deffinate issue for the county and city.
Lyn,
I believe that it is not the SQF, it's the loan amount, but hope that you get this solved, please us know and keep us updated :P