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Can I get an FHA Loan for a Foreclosure?

There is a foreclosure for sale that I would like to purchase.  I would to qualify for an FHA loan.  The asking price is $695000.  The home sold in 2005 for $1,200,000.  It currently appraises for well over the asking price.  I currently own a duplex that I would like to keep for investment purposes.  Should I refi the duplex to get a lower payment to help with the loan?

  • November 27 2009 - Whittier
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Answers (3)


Equity in your current property would be needed for two reasons...
Reason #1 to help refinance, Reason #2 to be able to use the rent if you buy another property unless your mother will solely be left connected to the duplex after you refinance then reason #2 wouldn't apply.

Getting things done prior or having a plan before moving forward would be good.
 
If you need more explanations let me know.

Good luck.   
  • November 28 2009
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Thanks for the answer.  I am in Whittier, Ca.  Would the equity amount change if my mother whom is the co-owner of house and will be staying in the house, still has the house as a primary residence.  Or should I get this done prior to starting the loan for the new house?
  • November 27 2009
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You can get a FHA loan for a foreclosure.  However, it's subject to the loan limits for the area.  Since you didn't indicate where you were I'll direct you to HUD's website

https://entp.hud.gov/idapp/html/hicostlook.cfm

It will be difficult to refinance your duplex unless you have 25% equity because you won't be able to claim it as a primary residence and it will be viewed as an investment property.
  • November 27 2009
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