Home Buying in 97503>Question Details

LuWana Rowe, Home Buyer in White City, OR

Are forclosed homes covered on USDA loans?

Asked by LuWana Rowe, White City, OR Wed Aug 29, 2012

Help the community by answering this question:


USDA doesn't to differentiate between a bank owned home or one that is not. They do have some criteria many are not aware of though that it is good to be aware of.

1. No pools.
2. No large outbuildings (yes it's a rural loan but rural doesnt mean farm)
3. Only brand new manufactured homes( if you can find a lender)
4. No properties listed as in a flood zone.

in addition, the map eligibility areas are changing soon so be extra careful that you don't fall in love with a property only to find out it won't qualify come October. Here is the link you will need. http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do make sure you re-check it if the home is on the fringe of a qualifying area.

Also, the programs fees are going up so make sure you get re-qualified based on the correct upfront fee and monthly MI charges. Don't get caught not qualifiying at the last minute because you're buying at the top of your price range.

Good luck and if you need anything at all I can be reached at 541-342-2535.
0 votes Thank Flag Link Sat Sep 1, 2012
Hi LuWana,

Yes BUT the home must meet HUD/FHA health and safety standards because USDA requires that the home to be appraised by an FHA approved appraiser to HUD/FHA standards.

Required repairs are limited to those repairs necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants, A.K.A. the three S’s:
Safety: protect the health and safety of the occupants
Security: protect the security of the property (security for the FHA insured mortgage.)
Soundness: correct physical deficiencies or conditions affecting structural integrity

In most cases the listing will give you a hint about whether or not the home will meet FHA, USDA, or VA appraisal requirements by stating something like cash or conventional financing only or as is.

Your agent should also be able to help determine whether or not a home is going to pass the appraisal requirements.

Please feel free to contact me for more information or help. You can also find more info on my USDA Mortgage website by clicking the link below.

John Burke
Senior Mortgage Banker
ENG Lending
0 votes Thank Flag Link Thu Aug 30, 2012
USDA loans are available in certain rural areas. It does not matter if they are foreclosed or not. If you are looking at a specific home, this link will help you to determine if it is eligable for a USDA loan:
0 votes Thank Flag Link Wed Aug 29, 2012
Yes. Please contact me if you have any other questions.

Joe Barrett
0 votes Thank Flag Link Wed Aug 29, 2012
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