deciding on renovation of old stick or buying new manufactured

[amy mason]

My husband and I purchased a 70 yr old stick built home in 1990. It is located in a desireable location for us to stay in Hubbard Lake Michigan. At that time we were financed through FMHA now Rural Housing Development. It was supposedly up to code at that time. The purchase loan was for 39,500. 2yrs ago we had it appraised at 68,000 without many upgrades that needed to be done. Of course we did not point out problems wanting the highest appraisal possible . Many problems were obvious (need of windows new roof septic upgrade, bathroom deterioration and need of new floor covering throughout.( though we had done this in 1995 it needes to be done again for reasons to follow). We had just remodeled the kitchen in 2003.. We have rising water levels in our area which have flooded us since we arrived. The fire dept had to pump out our partial basement 2wice resulting in the loss of both the furnace and hot water heater. In 1996 We had to fill the ntire basement with aggrifill and concrtete hoping to solve the water problem following contractor advise that this would fix the problem. We bought a new furnace and hot water heater also. Our township does not participate in flood zoning so we cannot purchase flood insurance. We replace the carpet in the lower level 2 times. Continually the water seeps through the foundation walls ,dissolving the bottom of the foudation block and mortar. Large cracks in the foundation make it eccessible to mice which we battle contantly. This last year 2005 and also beginning of 2006 we ripped up the entire floor, layers of subfloorin too and installed all new flooring commercial grade lifetime warranted vynl tile flooring, We set ceramic and porcelain entrance pads new our brand new exterior doors. And completely gutted the rotting bathroom down to the floor joices and wall studs and installed ceramic and porcelain tile bathroom (from floor to ceiling). We finished the garage for a music studio (half of the 2 car space) I cashed in my retirement fund to do this work. We do not know the value of it since this work was done, but we discovered vermiculit in the walls which the EPA requires professional cleanup due to asbestos.. which will cost near 5000.00 Our electical is so outdated that we cannot use new appliance that we purchased. Nothing is grounded. There is buzzing in my walls and breakers pop constantly. We are unable to redo wiring without disturbing the vermiculite. The home needs to be raised and the foundation redone.The septic needs to be replaced .The water table has risen from 3-4 ft to 1-2 ft according to our most recent eval done 3-24-06. We will have to bring in dirt of course. Most Of these problems have occurred since the roads have been redone and gas lines went into the neighbor hood and really disturbed the ditches I have been fighting them for the last 6 months and have gotten no where. I have zero equity in this home due to subsidy recapture. To pay it off now without these repairs will cost me 70,000.00 according the Usda. My question... do I just drop this place and get a modular. Or is putting an additional 70,000.00 into this place going to be worth it. If we do not do this work, I fear about the fire /asbestos/mold hazards. If I do do the work, I will be 140,000.00 indebted to USDA, plus the 20,000.00 I already put into it on my own, and remind you I have zero equity after 15 years. If I decide not to, what is my option? File bankrupcy? Ill never get another home loan again. I love my home. I feel that we really got a lemon. I am at aloss. Would really appreciate your input. Thank you.

Sincerely,

[rmurray]

Oh but this is a real stick built house....How could this be true....Sorry for the sarcasm....but is this kind of home we all lose sales to when they go on and buy a "real" house...

As far as advice is concerned...you will have to talk to your own attorney...You may not be able to file bk on this loan...Government looks out for itself...Most time you cannot reduce IRS and Student loan obligations either..Might be the same for this government agency...Only your attorney can tell you about your situation.....

Since you are so upset..you might want to figure how to proceed and buy a new home....To get a hold of your life....Good Luck...