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Denied for using my VA loan through Fannie

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  • Denied for using my VA loan through Fannie

    Can this really happen? I put a bid in on a foreclosure through Home Path and also added 1.5 times the cost in escrow to fix the things needed, and would pay my own closing costs. I was told by the listing agent that I did not get the house not because I was out bidded, but that I was using my VA loan!

    What good are my VA benefits if I can't even use them to buy from Fannie??

  • #2
    Re: Denied for using my VA loan through Fannie

    If one is outbid on a property, they are outbid! Fannie Mae, Freddie Mac and H.U.D. put their foreclosures up for bid and the property goes to the highest bidder. You were not, so you lost out. The type of financing made no difference in this case.

    Further, when a property needs repairs, be it VA or H.U.D. financed, there must be enough funds to bring the property up to standard before a loan is approved. With FHA's, a 203 loan application must accompany if the property is in poor repair and ones does not have the cash to make the repairs immediately.

    You can use your VA with Fannie Mae. You just have to be the highest bidder. And the property appraise.

    Comment


    • #3
      Re: Denied for using my VA loan through Fannie

      I understand that. But I was told from the listing agent that I won the bid and was denied the house b/c I was using my VA loan. I had no problems with my loan officer or the underwriter and had the money for repairs and escrow plus additional monies if it appraised lower.

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      • #4
        Re: Denied for using my VA loan through Fannie

        Originally posted by Mset View Post
        I understand that. But I was told from the listing agent that I won the bid and was denied the house b/c I was using my VA loan. I had no problems with my loan officer or the underwriter and had the money for repairs and escrow plus additional monies if it appraised lower.
        This needs to be taken up with the VA for if you met all requirements, including having the winning bid, there needs to be an explanation why Fannie Mae would not accept a VA guaranteed loan. Between the two bureaucracies, there has to be a policy -- that can be supported by regulation. If not, then your state senator's office would be a good place to start.

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        • #5
          Re: Denied for using my VA loan through Fannie

          I have contacted my senators office, called the state board of real estate, and called Fannie. No word back from my senators office as of yet. The state board said they only deal with realtors, and Fannie sent me to level 2 response and the call back only said that Fannie can take the Highest and best and would refuse to elaborate. When I called VA, I was not able to talk to someone that understood what I was trying to tell them. they kept trying to refer me to financial services. I know I have been wronged but feel totally helpless and angry that I was unable to get a house that I wanted.

          Comment


          • #6
            Re: Denied for using my VA loan through Fannie

            Best appears to be the operative word. If they were not suitably impressed with your employment and income record, they likely viewed best as moving the obligation to a non government entity.
            Due to a recent promotion, I should now be referred to as Major Obvious.

            I would not be trying to provide information and knowledge if I did not sympathize.

            Some days it is just not worth chewing through the restraints to face life.

            Comment


            • #7
              Re: Denied for using my VA loan through Fannie

              189k last year, and in the same field for 8 years, 790 credit, 15k in escrow, I pay my closing costs, I could go on but I think you get the point. All I get is that they were lazy! They took a conventional loan over mine. You know what... I wasn't lazy when I was deployed!!!! Great work on getting a Vet into a house.

              Comment


              • #8
                Re: Denied for using my VA loan through Fannie

                If you make 189k a year, you should not need a loan and should be able to come up with more than 15k down. 790 credit is level 2, again a second red flag in your income bracket.
                Due to a recent promotion, I should now be referred to as Major Obvious.

                I would not be trying to provide information and knowledge if I did not sympathize.

                Some days it is just not worth chewing through the restraints to face life.

                Comment


                • #9
                  Re: Denied for using my VA loan through Fannie

                  15k is for the repairs needed at 1.5 times the amount. And why wouldn't I need a loan for a house? With a VA there is no down payment and no MI, so why wouldn't I use a benefit that is available to me?

                  Comment


                  • #10
                    Re: Denied for using my VA loan through Fannie

                    So you admit you not present the BEST offer. Up the ante next time.
                    Due to a recent promotion, I should now be referred to as Major Obvious.

                    I would not be trying to provide information and knowledge if I did not sympathize.

                    Some days it is just not worth chewing through the restraints to face life.

                    Comment


                    • #11
                      Re: Denied for using my VA loan through Fannie

                      Mine was the top offer as I stated before. And what or who decides BEST? How they woke up that day? Maybe they had a better name than me? What is best offer if not highest? I was told I had the highest bid in and did not get it due to the fact that I was using my VA loan.

                      Comment


                      • #12
                        Re: Denied for using my VA loan through Fannie

                        You're not helping. I'm waiting for a call back from the VA though.

                        Comment


                        • #13
                          Re: Denied for using my VA loan through Fannie

                          It took me reading through the entire thread to see the problem. It wasn't until the author disclosed that it was 15k for repairs that the denial made sense. That revelation means that you were trying to buy a fixer using a VA loan.

                          Using a VA loan will require the repairs to be made prior to closing. While you say you will do it, that puts the seller in a precarious position if you cannot complete your loan.

                          Conceivably, if the seller allowed you to make those repairs and fail to close the loan, you (or your contractor) could file a mechanics lien against the property. This muddies the water for the next buyer.
                          If I'm a seller, I would opt for the buyer using a loan that does not require the repairs..

                          So, in a nutshell, yes you were denied because you were using a VA loan to buy this type of property. But, there was nothing unpatriotic about it. You were trying to buy a fixer upper using a VA loan. VA does not allow a Veteran to buy junk. Your Realtor should have advised you of that.

                          --2nd Generation Realtor, Broker, Veteran and Veteran Advocate.

                          Comment


                          • #14
                            Re: Denied for using my VA loan through Fannie

                            Your summary post above helped me. I just came to this through a Google search and I have a similar situation, I also was confused though these comments do help somewhat.

                            Comment


                            • #15
                              Re: Denied for using my VA loan through Fannie

                              I guess I am not the only one if this thread has been viewed 4000 times !

                              Comment

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