SBA loan for a house?

jockewingJune 1, 2011

I am currently in the process of selling the house I inherited from my grandmother last year.

I just accepted an offer from someone who has already been approved for an SBA (Small Business Association) loan. The house they are currently in is mortgaged through SBA. Have you ever heard of this? I thought SBA loans could only be used for business purposes. Since we are in the New Orleans area, I wonder if it has something to do with the hurricane?

This is all making me nervous, because my sale won't happen unless the sale on their house happens. Apparently these people are pretty hard up and upside down and are desperate to get into my house, which is much cheaper. They are choosing to forgo an official inspection because they don't have the money. Apparently, the buyer is a mechanic and he will self-inspect. There is a last minute glitch in the offer on their house which is hopefully in the process of getting ironed out as we speak.

The realtor tells me that once the offers are signed, it will take 20 days for the SBA to have the financing ready, and the closing is scheduled for July 15.

Yuck--I am getting stressed already and it hasn't even been a day yet!

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maurenemm

I'm not familiar with SBA loans but I did a really quick search. The only stuff I found on SBA loans were for commercial loans. I wonder if he's eligible for this program because he is a mechanic that plans on working out of home?? Just a guess.

    Bookmark   June 2, 2011 at 8:23AM
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jockewing

Luckily, the glitch in the offer on their house was ironed out, so we have accepted contracts on both sides. I will feel better after the inspections have gone through in a week or so. After that, I hope there are no problems with the SBA financing. According to the realtor, the buyer has already been approved, but it looks like you have to submit all kinds of documentation to the SBA before they will release funds. That is supposed to happen in 20 days from the day the buyer provides all paperwork, which is supposed to be within the weekend. Keeping fingers crossed!

    Bookmark   June 2, 2011 at 12:11PM
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marie_ndcal

Just a thought, and it may be too late to document, did you (or your realtor) put into the contract--To be sold AS IS-- or something to that wording. Because there wont' be an inspection, you don't want any surprises down the road. Also are they getting insurance (can't think of the name of it, if anything breaks etc)

    Bookmark   June 2, 2011 at 1:44PM
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marie_ndcal

Another thought? Is your area zoned for small businesses?

    Bookmark   June 2, 2011 at 1:46PM
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barbcollins

SBA does offer homeowner loans in disaster area:

http://www.sba.gov/content/home-and-personal-property-loans

    Bookmark   June 2, 2011 at 8:41PM
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jockewing

I figured it must be something to do with the hurricane. I really don't care where the buyers get their financing as long as they pay for the house. I just wish the buyer wasn't dependent on selling their house. Every single person that was serious about making an offer had to sell their house first.

    Bookmark   June 3, 2011 at 10:24AM
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