April 8th – Decided after our current condo that we are renting went up for sale that we should take the leap and start house hunting in Chicago
April 12th – Connected with agent that was referred to by partner’s co-workers
April 14th – Pre-approved for 600K FHA Loan @ 2.75% for Multi -Unit
April 17th – Viewed 4 properties. 3 – 2-Flats and 1 SFH
April 18th – Decided to submit offer for 2-Flat, Listing Price: 499K Offered: 521K FHA, $10K Earnest Closing Date: 05.28
April 19th – Offer Accepted ( over 5 other offers which is INSANE)
April 20th – 30th – INSPECTIONS. The seller had a previous inspection report that he sent over and we had our inspections. Both were pretty consistent. We decided to get additional roof inspection (Deal breaker) and pest inspection (checking for significant terminate damage). Both came back great, but we were able to get $5000 Seller Credit for hail damage on roof and gutters
Next we had to wait for Appraisal to come back.
May 21st – 25th WHEN THINGS GOT IFFY:
While we were waiting for the appraisal my partner and I noticed that our loan documents had changed. See original link for more details. So here’s the thing. Going into this with our LO, my partner and I were clear with our budget, what we were comfortable putting as a down payment, how much we wanted to keep in our bank accounts, we didn’t want to borrow from 401k, etc. I HAD A SPREADSHEET AND SHARED IT WITH OUR LO.
Somehow during underwriting our 3.5% down payment was doubled to 7% which was an extra $18,235 that we had not planned to use. When I asked my LO about it she said she didn’t know what happened and had to get with the underwriters. She got back with us Monday and we were supposed to close on Friday.
Her explanation was that she wasn’t aware of the FHA cap for Multi-Units, which was $485,500, and we had to pay the difference in our down payment so the underwriters changed it. Our response: We’re walking. Her response: I’ll call my manager. Manager came back with offer for $10k Lender Credit, but interest rate is now 3%. Our response: We’re walking. We explained that our LO practically sold us into going for a Multi-Unit instead of a SFH and that she guaranteed us that we could do a 3.5% down payment up to 800K. Plus the .25% would be an extra $66 a month. (Yes at this point we were being petty, but also I felt like we needed to stand up for ourselves.) LO/Managers response: Most people refinance out of FHA loans after 5 years, we’ll give you $66/month for 4.5 years in lender credits on top of 10k. Total Lender Credits: $13,564
May 25th – Wire $$ for closing on 05.28, still waiting or appraisal.
May 27th – Push closing since appraisal still isn’t back
May 28th – Appraisal comes back at 530K, but with the condition that Seller paints all the exterior chipped paint before closing. Seller Agrees.
June 7th – Chipped Paint is inspected and passes.
June 9th – Closing scheduled for 330pm. We receive CO at 3pm and our LO calls to tell us that we need an additional $3500 cashier’s check. She had assured us that the money wired would be enough, but didn’t take into consideration property tax pre payments. Luckily we’re close to the Title company downtown (we rode our bikes there) and a Chase bank is right on the corner. Arrive with Cashier’s Check in hand at 330pm. Attorney finds some discrepancies and we end up with an additional $1365 credit from seller. Closing lasts around 3.5 hours.
THIS HAS BEEN A JOURNEY. We wanted to throw in the towel several times, but didn’t and now we’re the proud owners of a 2-Flat in Chicago!
Thank you for all the advice and resources. We bought a house with a FHA loan in a crazy market in Chicago.