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Can you get an fha loan on a foreclosure that is lender owned?

Profile picture for DeannaLL
I'm prequalified for an FHA loan and found a great place but it's lender owned.  I would rather do an FHA than a conventional loan (which I would do if I absolutely had to).  What are my options?
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October 01 - Scottsdale
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Profile picture for Palmdale Mortgage
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know that on well priced home there will be multiple offers and usually the strongest offer wins.
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3 days ago
Profile picture for nealadler
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Kevin, hit the nail on the head.  When you are making an offer on a property that has mulitple offers, whether it's an REO or not most seller's would rather sell to a conventional buyer especially with 20% or more down. If you really want the house, and have 20% down and there are multiple offers, you would most likely be more competitive with conventional.  However, that being said if there are no other offers and the property will qualifiy FHA, then FHA might be the way to go.  Your best bet is to have your agent contact the listing agent and get the 'lowdown' on the property and get a feel for the competition etc.
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3 days ago
We are purchasing an REO with an FHA loan.  But we have also lost out on a couple of REOs to comparable bidders who were putting 20% or more down and faster closings.  It really depends on the market conditions.  If you are bidding on houses that have multiple bids, you could lose out even if you are the highest bidder as sellers view conventional loans with higher down payments as more likely to close.  However if you are the first bidder and/or the only bidder then you definitely have a good shot as most banks would rather sell then let the property languish.
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4 days ago
There shouldn't be a problem purchasing a foreclosure with an FHA loan. They are definitely becoming the most common type of financing now, as most lenders will not do conventionals unless you bring 10% or 20% down.

FYI: See if you can qualify to have the government pay for 22% of your home price with your FHA. There is also a new $100 down program for HUD owned REO's I have a lender that will do these loans if yours isn't doing them... they are a great opportunity to take advantage of!
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October 07
Profile picture for paulklenk
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Another factor in 'will the bank take your FHA offer?' will be 'who is your agent?', and, how do they sell you, the loan and their ability to the listing agent.  If you have an agent that says it can't be done - he/she probably can't get it done.  Find an agent with the experience and energy to get it done.  It is more work.

There are too many bank owned properties for the banks to ignore the first-time buyers who are mostly using FHA loans.  Their listing agents should be happy to receive any offer - even FHA offers.

Let's hear from listing agents.  If you list foreclosures - are your seller banks accepting FHA offers?  What are the circumstances that cause problems in getting them closed?
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October 07
Profile picture for Bob Lowery
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Yes, you can do a FHA loan on a foreclosed properties.   I have done several.  The only thing you need to be aware of is....... if there are repairs noted by the appraiser, they will have to be repaired prior to settlement by the seller/lender and/or buyer.

And, yes, I have had some banks to repairs even though they were listed as "As Is".
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October 07
Profile picture for mjseligman
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You can use FHA -- it's up to the Lender/owner which deal they take -- make sure you have a rock solid approval -- and prove it to the bank --  they like cash offers
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October 07
Asset managers (bank owned homes) will work with FHA loans.

You may be shut out by all cash investors.

Here is a link to the Top 10 Ways to Buy a Bank Owned Home

http://www.ScottsdaleForeclosure.blogspot.com

Good luck!
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October 06
Profile picture for NeedinFHA
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Hmm, my house was a forclosure, but the owner purchased it after the forclosure and I got a FHA loan.
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October 01
Profile picture for AgentSteph77
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I recently had a buyer close an FHA loan on a bank-owned townhome. The bank made several repairs AND paid $5,000 of our closing costs. That being said, the bank doesn't have to accept an offer from a buyer who is using an FHA loan. They could chose another offer altogether - even if it is a lower dollar figure. Basically is it the bank's perogative to work with whichever offer they want.

HUD, however, tends to give preference to owner-occupants as a rule over investors.
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October 01
I've dealt with several FHA properties. Most foreclosures do NOT qualify for FHA financing. Don't let anyone tell you different.
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October 01
Profile picture for paulklenk
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Yes, you can.

The bank may balk at doing any repairs.  they will imagine an FHA buyer needing assistance with the money and figure they will also have to manage the repairs.  The banks property manager will not want to do this, but if you have an good buyer's agent either they can talk the listing agent into managing the repairs/contractors, or your agent can.

The money is the other issue.  If there are no other buyers, or it is unlikley the home can sell without the completetion of the repairs, your agent and the listing agent can make the case to the bank to accept your offer.

I recently closed an FHA loan on a home that had siding issues + other issues.  Over $5000 in repairs.

Patience - Good Luck.

If you haven't started interviewing for a local agent I can refer you to a local agent, give me a call or email.
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October 01
Profile picture for Carl Henker
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It should make no difference to the seller/bank what loan program you use.  FHA loans are done on bank owned properties all the time.  Good Luck and stand your ground the loan choice is yours not the seller.
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October 01
Profile picture for Lynnwood_Realtor
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I have sold bank owned homes to a buyer using an FHA loan, the banks generally have no problem with that BUT a conventional buyer will usually look better to the bank because of the higher down payment and the tighter ratios. I say give it a go!
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October 01
 

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