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Can you use an FHA loan to buy a house that is a foreclosure? What red tape is involved? Thank you!

Profile picture for grotzigurl
Unfortunately I don't have 20% to put towards a down payment so I've been told by mortgage brokers that I would have to look at getting an FHA loan. This loan is touted as being wonderful for people with my predicament but it seems like there is a lot of red tape involved. I've been told that it is nearly impossible to get a condo out east (Wilton Manors/Victoria Park) if you don't have a conventional loan and that buying a condo with an FHA loan requires magic, a unicorn, and/ or a miracle from God. I've started looking at small,single family homes but before I pursue this route, I wanted to know if this type of property is difficult to get approved by FHA inspectors and whether or not I can use an FHA loan to purchase this type of property. Thank you in advance for you time.
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March 07 2009 - Idlewyld
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Answers (3)

Profile picture for GS4Realty
Definitely. If you qualify for FHA financing, than a small home is the way to go and probably easier than trying to determine which condo would allow FHA financing.  I wouldn't worry about "red tape"...if the home is habitable with running water ( you can ask your lender more exact requirements but they aren't that difficult anymore) and go for it!  Great idea.... this could work out even better for you as an overall investment.  Generally speaking, you will experience greater appreciation in a home than in a condo.  Good luck and Enjoy it.Geri
www.homesbygeri.com
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May 08 2009
Profile picture for pacific mortgage srv
With  private mortgage insurance companies disallowing condos in FLA  you're right.  First go into HUD.GOV and you can check out by zip-code the FHA approved condos in your target market.  Those condos that are "approved" only are the ones where you can get FHA financing on.  Otherwise, an FHA spot approval can be done by your lender and as long as the condo association does not have "first right of refusal" then you can pursue FHA financing with said condo.  Good Luck.
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March 07 2009
Profile picture for Martin Wareing
Big hurdle is making sure the CONDO is FHA approved... Also, be very careful about CONDOS overall.. I have one, but... a condo is an association of fellow owners....  if they all tank.... the association tanks...  value plummets.. lights shut off... Look very closely at the stability of the association.  You will find many... if not most are in BIG TROUBLE in FL... That is a big reason lenders run from condos in today's FL market.  Good luck.
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March 07 2009
 

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QuestionCan you use an FHA loan to buy a house that is a foreclosure? What red tape is involved? Thank you!
  • Latest answer by Geri Solomon
  • May 08 2009
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