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Is it possible to use FHA on a foreclosed property?

  • March 22 2011 - Cooper City
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Answers (7)



There are a couple documents that FHA guidelines require the seller sign at the closing.  When purchasing at a foreclosure auction there may not be anyone able or willing to sign these documents.  In New Hampshire it is not uncommon for the attorney handling the foreclosure to refuse to sign any documents other than the Deed and HUD Settlement Statement.  If you are purchasing directly at the auction, I would have a conversation with the legal representative from the foreclosing bank or mortgage company to make certain they are able and willing to sign any documentation required in order for you to obtain FHA financing. If they consent, get it in writing.  I would strongly recommend that anyone planning to purchase at a foreclosure auction speak with a real estate attorney before making a bid.  There are risks purchasing at a foreclosure auction that you may not have confronted in any prior home purchases.  You need to make certain you are familiar with and account for any risks associated with purchasing at a foreclosure.



  • March 27 2011
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You must noy have dealt with too many foreclosed homes then.  Foreclosed homes are far more likely to have deferred maintenance and require FHA repairs than a non foreclosed property.
  • March 27 2011
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Yes it can in most cases that I have been involved it passed.
  • March 27 2011
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Profile picture for kristisar
Shayne has the best answer- not every home can be sold using an FHA loan, bank owned or not. Check with an agent to verify that it has passed inspection and good luck!
  • March 22 2011
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Yes.  As a matter of fact, many people are using the FHA 203k Rehab loan to repair damages on Foreclosures.  That may be something to check out too.
  • March 22 2011
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Absolutely. The trick is if repairs need done to close. Sometimes a lender will do them, but more often than not, NO.

It also reduces your negotiating power if there is a multiple offer scenario and the other offer is not FHA. Banks know that conventional loans have a better chance of actually closing.
  • March 22 2011
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Yes, as long as the home passes the FHA inspection.
  • March 22 2011
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