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Rural Housing Loans

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Lee SW IL

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
I am selling my previous home. I have a contract. The buyer is obtaining a rural housing loan. I am looking for some more information on this type of loan.

From what the REALTOR told me, this type of loan is for 100% ( or almost ) of the purchase price.

The buyer wants a large oil tank (probably 200 gallons) that was used for the OLD furnace taken out. There is still some oil in the tank, not sure how much. Tank does not leak, and appears to be in decent condition. The only way to get this out is to cut it out, which I aint bout to do that.

Another issue is attic access. The house is 100 + years old, 1.5 Story, with very little actual attic area. So when I remodeled, I drywalled everything. I have no access to the attic area. Do I need to change this? Would this be an issue for an FHA or VA loan?

Where can I get some of the guidelines for this type of loan.

Thanks
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
All issues in a sales contract are negotiable. You are working with a buyer who has very little cash available. You don't have to do anything really but you may loose your buyer if you don't. RD does not "require" attic access but it does require a R-36 insulation in the attic (in our area at least) and visual proof by the appraiser. Sort of a Catch-22. My suggestion would be to figure out a way to reopen the attic so the appraiser can verify the insulation and you can add any that is necessary.

As for the buried tank; remember there are only two kinds of buried tanks...Those that have leaked and those that haven't yet. If it were mine, I'd get that puppy out of the ground regardless of the purchase agreement. If you want to see your equity disappear fast, just wait until you have a leaking fuel oil in the ground. You can sell the oil that is in the tank back to the company that will take it out. That will help defray some of the cost but the cleanup from a leaking oil tank can cost a lot of money.

If you want the guidelines for an RD appraiser, send me a msg with an email address and I'll send you a copy of mine in Word .doc.
 

Lee SW IL

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Thanks for your reply Richard.

The oil tank in question is in the basement, not in the ground. It does not take up that much space in the basement. Again does not leak, does not show any signs of problems. Is not hooked up to anything. The basement could never be finished.

Will PM you.

Thanks
 

Tim The Enchanter

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I'd think you would probably want to drain the tank at least.
Maybe the buyer can cut it in half to get it out, and turn it into a big barbeque. :D
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
If it's 'Rural Gold' (used to be USDA) it's kinda like an FHA with specific insulation requirements. (My 2 cents)
 
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