Can I Buy a Foreclosure With An FHA Loan?

Does FHA allow you to purchase a house that is in foreclosure?

Right so you’ve been shopping for homes and you’re really hoping to be able to find a deal and so you found a couple of foreclosures that you’re interested in and you want to know can i buy a foreclosure using an fha loan well that’s the question we’re going to tackle in today’s video so stay tuned hey what’s up everyone this is channing the owner of bayou mortgage

And like i said we’re going to talk about foreclosures and fha loans today and so let’s just go ahead and dive into it can you buy a house that is being foreclosed on or has been foreclosed on and use your fha loan and the answer is you can fha doesn’t have any restrictions on you purchasing a home no matter if it’s being sold by the homeowner or the bank or

Anyone so a foreclosure you with your fha loan is wide open but there’s some things that you need to consider because not all foreclosures are created equally so if it’s a foreclosure and it’s in bad shape and it’s going to need work and it doesn’t have electricity and there’s all these different factors going on then you may find it difficult to finance that

Home using an fha loan because fha has certain property standards that must be met in order for you to be able to finance it using an fha loan so if the windows are busted if there’s peeling paint if the power is not on if there’s plumbing issues you know roofing issues i mean the list goes on and on and unfortunately a lot of times when homes are being foreclosed

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Upon the person living there doesn’t take the best care of the property and sometimes they even intentionally damage the home so if it’s one of those types of homes where it’s been damaged it hasn’t been fixed you’re probably not going to be able to get that with an fha loan but if it is a home that’s foreclosed upon but the bank or whoever owns the home has gone

Through the process of rehabbing the home and getting it back to live in move in condition then you actually could purchase that home as long as it doesn’t have any of the defects that you know like we talked about or no floors or you know different things like that now you’re still going to need them to turn the power on you’re still going to need them to turn

The water on because those are going to be requirements for an fha appraisal so you want to iron out all these details before you jump into the process of buying this foreclosure because it could be a disaster if they refuse to turn the power or the electricity or the electricity or the water on because you need to have those things in order for your appraisal

To be approved so the other thing the last thing that you have to consider is that foreclosures do not always go smoothly so in fact i can only think of one time that i’ve ever done one where it wasn’t that bad the rest of the time there’s a lot of back and forth not only for your own loan between the lender the loan officer and the bank and you getting documents

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And getting everything cleared but then once all that’s done the seller wants to see everything clear everything and they usually have some kind of crazy timeline five days ten days that they have to get everything in advance before you can close on the home we’ve actually had them not show up to a closing and so we had to push the closing ended up being two weeks

Later because they went on vacation and didn’t tell anyone it was a crazy crazy story so i don’t say that to scare you but just know that going into it you’re going to pay for it being a deal somehow and usually it’s going to be in frustration and timing because they’re not always going to be as smooth or happen as quickly as you want them to happen and so you need

To be able to plan for that accordingly to make sure that you are you know ready for any potential hiccups that happen because you’re buying a foreclosure so there is a deal you can get a deal right if you buy foreclosure usually but you need to make sure that it’s actually in move-in ready condition that they’re willing to put the power and the water on and just

Expect delays right so if you do those things and you’re okay with those things then by all means move forward so yes you can buy foreclosure even on fha as always guys please like the video subscribe to the channel and i look forward to talking to you soon you

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Transcribed from video
Can I Buy a Foreclosure With An FHA Loan? By Channing Moore