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Can you get a FHA loan for an auction home?

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June 03 2009 - Chelsea
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Answers (5)

With the market on 'fire' here in Michigan, it is very difficult to obtain an auction home on FHA financing. Probably 98% of the auction homes have a laundry list of repair items needed to pass the FHA inspection/appraisal. When they go to auction, they usually sell as-is for cash. The bank just wants to unload them fast at that point.

If you seek a Fannie Mae/Freddie Mac MLS listed Foreclosure instead of an auction home, you stand a much better chance. Fannie & Freddie have recently started repairing homes to surpass FHA standards and they have the first 15 days of listing period reserved for 'owner occupant' bidders. This allows the owner occupants a chance at the home without competing with the cash investors.

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March 07 2013
Most auction homes are listed under cash terms. So usually NO. Plus typically auction homes are foreclosures and most of the time they dont qualify for FHA financing.
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February 28 2013
Williams & Williams Worldwide Real Estate Auction handles FHA loans on a case by case basis with the property and Buyer/Seller. It's important to understand that the acceptance of an FHA loan is ultimately the Seller's decision, not the auction house's decision. The property must meet the FHA/VA price requirements (which vary by area) and appraise at or above the purchase price by an FHA/VA appraiser. Additionally, the appraiser may point out items which must be repaired or escrowed for prior to closing. This can be a sticking point with the Seller as they sell "as is" in most auctions, but can usually be overcome with an escrow for repairs. Williams & Williams offers open houses and our properties can also be accessed and inspected if you are accompanied by a Realtor or Licensed Contractor.  We encourage you to attend our open houses and inspect the property you are interested in. The transaction will be much smoother if you understand your financing options and get pre-approved before you come to the auction. We have a great Auction 101 and FAQ on our site as well as an easy to search property listing. You can search our properties and learn more about auction at www.williamsauction.com
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June 04 2009
I know from past experiences with REDC auctions when they say 'cash only' that was a boarded up house that would never pass FHA inspection (and needed to be brought up to full city code).

Most reputable auction companies will have multiple open house days prior to the auction. Make sure you inspect the property before you bid or risk not being able to finance in the end.
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June 03 2009
It depends. Most auction companies such as REDC and Hudson and Marshall do allow Fha. Williams and Williams probably not.

However, just because the auction company will allow FHA, does not mean that the property will pass an FHA inspection. Leaking roof, plumbing leaks, no stove, the inability to turn the power on for the inspection are all reasons to probably pass on auction property if you must go FHA. Definately pass on the property if your contract is not contingent on financing. With Many auction companies your earnest money may not be refundable. They are considered all cash as-is contracts. Check before you bid!!!
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June 03 2009
 
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