“D” was referred this week by a banker friend because she recently inherited a property from her father and needed to obtain a mortgage to pay off his estate. The problem is that the home is zoned commercial and the city stated it CANNOT be re-built if destroyed.
The Situation
Credit score: 620
Credit is “ok”, but not great. She’s been working on it.
The home was build in 1920 and she wanted additional cash to install an updated electrical system.
4 years on the job, regular hourly employment,.
50% estimated LTV
We have a confirmed letter from the city that she CANNOT re-build if the home is destroyed more than 60%.
The Challenge
D’s bank would not do this deal because of the non-rebuild status from the city.
My company INTERNALLY won’t do the deal for the same reason, so we had to get creative.
How We Structured It
Conventional cash-out refinance using LPA accept/eligible findings.
We have LPA AUS approval, so running with that via broker channels.
One of our wholesale lenders has a policy expressly allowing this scenario, so we’re brokering the loan vs. trying to close it in-house.
We are processing the deal right now. The guidelines are clear that this is allowable, and I crossed all t’s by obtained a letter from underwriting before ordering the appraisal that we’re good to proceed.
Why This Might Matter
Many banks/lenders have overlays or restrictions that prevent some deals from closing. We may be more lenient internally or can broker the loan if appropriate.
Pattern To Watch For
Good equity position, even if scores are low.
The collateral seems like it should be acceptable, but doesn’t fit in your lending approval box.
Work With Me
Do you have a deal that doesn’t fit your credit policy but the client seems solid?
Reply to this email or call me at 616.298.2743 for a same-day answer.
What I Specialize In
HELOCs (complex income, credit issues, or property condition challenges)
VA loans with high DTI or non-traditional income
Low credit scores with compensating factors (equity, down payment, strong income)
Recent self-employment with documentable income
Non-QM and investor DSCR loans
Construction loans (especially investment property, FHA/VA construction, or large renovation projects)
What I Typically Don’t Do
Manufactured homes under $150K loan amount
Raw land purchases
Construction loans under $300K
One case study per week showing scenarios we’ve been able to help with