Home Buying in Pleasant Hill>Question Details

Claire Morris…, Home Buyer in Martinez, CA

Can a VA loan be applied to a pre-forecloure or foreclosure?

Asked by Claire Morris Dobie, Martinez, CA Sun Dec 16, 2012

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Yes. Below is a great link for VA loans.
1 vote Thank Flag Link Sun Dec 16, 2012
Absolutely YES! However, it will have to pass a VA value and condition appraisal. The home must be in liveable condition with appliances to include a stove. If the property is a great bargain and you have an approved contract, it may be worth your while to make small improvements (if needed) prior to closing to put the home in passing condition. Or, your lender may allow an escrow paid to a local contractor for completion of the repairs. This allowance could come from the seller.
0 votes Thank Flag Link Sun Dec 16, 2012
Sure, but it's a good idea to keep in mind the property does need to be in good condition and also it's often difficult to get a seller to accept a VA financed loan in a seller's market as they often will choose cash, conventional, and FHA financing first. I've had success in getting a bank owned home that is owned by either Fannie Mae of Freddie Mac to accept VA financing (again, when the property was in good condition and not in need of repairs).

Also, if you place an offer on a VA short sale (called a "compromise sale"), if your offer is accepted, the VA will use your VA appraisal instead of the seller's (all VA short sales will have a VA ordered appraisal even if the buyer is not using VA financing for the purchase).
0 votes Thank Flag Link Sun Dec 16, 2012
Yes – a VA loan can be used for both – however, the property has to be in good condition to qualify. Banks selling either short sales or REOs will NOT do any repairs, so if there are ANY property condition issues, the loan will not be approved.
0 votes Thank Flag Link Sun Dec 16, 2012
Pre foreclosure is also called a short sale. There is really no such thing as a foreclosure because that is a process to covert ownership from a defaulting owner to another party. Once it occurs there is a new owner and it is often the lender or bank that made the loan. Then it is called a bank owned home assuming the bank bought it. Yes, a VA loan can be used to buy a short sale or a bank owned home. Speak to a lender to find out more.
0 votes Thank Flag Link Sun Dec 16, 2012
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