Residential Loan Timing

[Fritz]

Hi,

What is the window of opportunity to take out a residential TSP loan? Specifically, can you get the loan after the home has been closed on, and if so, for how long? I can most likely handle the transaction without tapping into the TSP, but I'd like to know the time frame just in case I have to tap into the 15yr loan just in case.

Do you have 2 years from the time the home is purchased to get a longer term residential TSP loan?

Thank you

 

[Frixxxx]

Hi,

What is the window of opportunity to take out a residential TSP loan? Specifically, can you get the loan after the home has been closed on, and if so, for how long? I can most likely handle the transaction without tapping into the TSP, but I'd like to know the time frame just in case I have to tap into the 15yr loan just in case.

Do you have 2 years from the time the home is purchased to get a longer term residential TSP loan?

Thank you

https://www.tsp.gov/planparticipation/loans/loanBasics.shtml

The Loan has to be done during the purchase:

A residential loan cannot be used for:

• Refinancing or prepaying an existing mortgage
• Construction of an addition to an existing residence
• Renovations to an existing residence
• Buying out another person's share in the borrower's current residence
• The purchase of land only

 

[Fritz]

Thanks. What does this part mean (see underlined)?

Residential Loan Documentation


When you request a residential loan you must complete the Residential Loan Agreement and submit it, along with any required documentation, before your loan can be approved. This form documents the costs associated with the purchase or construction of your primary residence.
Documentation Requirements

All Residential Loans

All of your documentation must:

• Be from a third party (that is, someone who is selling the home to you or building it for you)
• Be dated no more than 24 months before the expiration date on the TSP Loan Agreement

It must also show:

• You or your spouse as the purchaser or builder
• Purchase or construction price
• Full address of the primary residence

 

[Frixxxx]

Thanks. What does this part mean (see underlined)?

Residential Loan Documentation


When you request a residential loan you must complete the Residential Loan Agreement and submit it, along with any required documentation, before your loan can be approved. This form documents the costs associated with the purchase or construction of your primary residence.
Documentation Requirements

All Residential Loans

All of your documentation must:

• Be from a third party (that is, someone who is selling the home to you or building it for you)
• Be dated no more than 24 months before the expiration date on the TSP Loan Agreement

It must also show:

• You or your spouse as the purchaser or builder
• Purchase or construction price
• Full address of the primary residence

That pertains to the any loan docs, property assessments, etc pertaining to the property itself.

 

[Fritz]

Thanks, the regs made it seem like they'll give you the residential loan as long as the home wasn't purchased more than 2 years earlier.

Title 5 § 1655.20

Residential loans.(a) A residential loan will be made only for the purchase or construction of the primary residence of the participant, or for the participant and his or her spouse, and for related purchase costs. The participant must actually bear all or part of the cost of the purchase. If the participant purchases a primary residence with someone other than his or her spouse, only the portion of the purchase costs that is borne by the participant will be considered in making the loan. A residential loan will not be made for the purpose of paying off an existing mortgage or otherwise providing financing for a primary residence purchased more than 2 years before the date of the loan application.

 

[Fritz]

Update: I just called the TSP people. You can buy the house and then get the 15yr residential loan as long as it is within 2 years.

Thanks,

 

[Talan150]

Great information Fritz. Thanks for sharing

 

[Frixxxx]

Update: I just called the TSP people. You can buy the house and then get the 15yr residential loan as long as it is within 2 years.

Thanks,

Thanks,

I called and got different information. Did you get a customer representative #? I want to be able to quote who said yes!

Great work though!

 

[Fritz]

I didn't get a name or rep #. I expect to buy a home soon as I am relocating back from overseas. I'll make sure to firm up that guidance before acting on it. We all know that if things go sideways with bad information, saying "Well Sally told me I could" won't give you a lot of traction.

It seems to make sense to allow an extended window for the residential loan. I could see a lot of situations where a housing transaction could take place with a new build or a especially a foreclosure or a home that needs a lot of work where the cost could go up following in the months following the transaction such as if someone buys a house and then finds a major structural problem that costs a ton to fix. The TSP people probably don't want to get into a situation where they have to evaluate the merits of individual requests so they added the extended window.

The TSP site should make it a bit clearer.

 

[merenobes]

Any Updates?

I know this thread was going awhile back, but did anybody happen to get confirmation of whether or not you can eat a residential loan after you've already closed on the house? (Assuming its within that 2 year timeframe)

Thanks!

 

[merenobes]

Hi! Did you ever hear/find out anymore about whether or not they will indeed allow a residential loan after the home has already been closed on (assuming it's within the 2 years)?

 

[Frixxxx]

I have not.

But I will try again!

Sorry, thanks for keeping me honest.....Since I just moved! I should have asked!

 

[merenobes]

I have not.

But I will try again!

Sorry, thanks for keeping me honest.....Since I just moved! I should have asked!

No worries, thanks for all of your helpful info on these boards! I'll post one way or another (approved or denied) so anybody else searching will have the info. Crossing my fingers...

 

[merenobes]

UPDATE: I just checked the status (and called TSP to verify), my residential loan has been approved and will be processed tonight. I closed on my house this PAST May (May 2012). So apparently documentation showing a house you've already closed on (within 2 years) that meets all the other criteria is acceptable for a residential loan.

I hope this helps anybody who finds this thread searching for info like I was doing this week!

 

[Frixxxx]

But how does that help you with the loan? Did you refinance?

 

[merenobes]

It doesn't really help with the loan, just allowed me to get the loan after I closed on the house. My situation is that I put down practically all my cash at closing (more than I had to) and didn't budget well enough for my first winter as a homeowner (I'm in interior Alaska, monthly heating fuel ranges from $1k to $1,500, ouch!). So it's essentially cushioning me from my own stupidity until spring when I can get ahead). I didn't do a regular loan because I already have a small one of those out and can't quite pay it off at the moment, but that's a whole other "dumb" story...

 

[emars]

UPDATE: I just checked the status (and called TSP to verify), my residential loan has been approved and will be processed tonight. I closed on my house this PAST May (May 2012). So apparently documentation showing a house you've already closed on (within 2 years) that meets all the other criteria is acceptable for a residential loan.

I hope this helps anybody who finds this thread searching for info like I was doing this week!

I realize this thread is quite old, however you are the only person I've seen on here so far that has done what I am trying to do and I was hoping to ask you a few questions. I closed on my house this past march and am trying to now get a residential loan. I submitted a copy of my binding contract. That is really the only tangible papers I was given at closing for some reason other than insurance documents. Do you think that will suffice considering I already went to closing? Also when you did this was your loan amount limited to only the amount of your downpayment/closing costs out of pocket expenses? For example if my portion of the closing costs were $5k will I be able to borrow $10k (I have enough in my tsp to cover this so that isn't an issue). If you could give some insight that would be great!