Home Buying in Philadelphia>Question Details

jalberto, Home Buyer in Philadelphia, PA

Financing a Foreclosure, A possibility?

Asked by jalberto, Philadelphia, PA Sat Jan 28, 2012

I am looking to rent my home witch i own, no mortgage and finance a foreclose bank own property with possible need of repair. Do bank lend movie for fixer uppers?

I ask because i notice mostly cash buys only for this types of homes.

If possible what type of loan is regularly used and its pros and cons?
Thanks in advance.

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Answers

12
As others have said, yes, banks will finance fix-up properties, if you are going to move into the home.

The bank who is selling the property may have a loan program in place, such as Home Path, and will give preference to a buyer who will occupy the property and use their loan program. In other situations, banks will give preference to Cash buyers.

Any of the available loans are fine. You do have to consider that the loan amount will be for the value of the property plus the cost of the repairs and improvements. On a case by case basis, you may get a bargain by purchasing and improving a foreclosure, or you may find that buying a property that is on the market, but not a foreclosure is you best deal.

An agent who is helping you search for a property can help you identify those homes which best suit your needs and your pocket book.

If you are looking in Northwest Philadelphia neighborhoods, I would be happy to help you.
Kathleen Sheridan
Weichert, Realtors - McCarthy Associates
ksheridanrealtor@gmail.com
1 vote Thank Flag Link Sat Jan 28, 2012
The short answer is that, yes, banks do finance properties that require rehabilitation. Two that you can look into are an FHA203(k) loan and a Fannie Mae Homepath Renovation Mortgage (if the property is owned by Fannie Mae (you can find FM-owned properties here: http://Homepath.com). However, just know that these types of loans involve very specific criteria for qualifying which properties and renovations qualify for financing under these programs. See the links below.

http://www.homepath.com/financing.html
http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou…


Good luck!
1 vote Thank Flag Link Sat Jan 28, 2012
Can you do a cash out refi on your existing home for enough to buy and renovate the purchase?
0 votes Thank Flag Link Tue Jan 31, 2012
Jalberto,

The main question that I have is how much work needs to be done? Conventional loans are always the easiest and hassle free but not all properties will be able to get conventional financing. There are loans such as 203K's (rehab loan) to insure borrowers have the financing to fix up the property. With a 203K loan the max that the bank will give you is $35,000. A contractors proposal will be needed so that the bank will see all the work that needs to be done. The $35,000 will then be disbursed like a construction loan. meaning a bank representative will go out and verify all work is being completed according to the proposal. I hope this helps a little, if it doesn’t, please feel free to contact me. Good luck

Best regards,

Stan Bril

Chief Operating Officer
Mortgage Unlimited, LLC
222 Outwater Lane Suite 4B
Garfield, NJ 07026
973.478.8444 x 1 Office
215.681.2444 Cell
215.689.0957 Fax
sbril@mucloan.com
NMLS # 181322
http://www.BestDirectLender.com
0 votes Thank Flag Link Tue Jan 31, 2012
Conventional seems to be the Leasest...

Please call for a confidential Talk

John Curci RE/MAX 215=757-2889
Web Reference: http://www.HomeCatch.com
0 votes Thank Flag Link Mon Jan 30, 2012
conventional seems to be the leeanes
You can call me for sdditional info.

Thanks John Curci RE/MAX 215-757-2889
http://www.HomeCatch.com
Web Reference: http://www.HomeCAtch.com
0 votes Thank Flag Link Mon Jan 30, 2012
Jalberto,

I have mortgage programs for financing properties in need of rehab.If you go to my website click on the link at the bottom for an explanation of how they work

Regards,
Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010
NMLS ID 143960
0 votes Thank Flag Link Sun Jan 29, 2012
Fannie mae has the first look option for home owners, You can do a Homepath Mortgage or if is a short sale , the bank will allow addtional time to get 203 or fha financing

Kindest Regards,

Michael P. Cohen ABR ASR, BPOR
Associate Broker
RE/MAX Access
1033 N. 2nd Street 5Th Floor
Philadelphia, PA 19123
Direct Line: 610-642-0347
Office: 215-400-2615
Greenfax: 610-680-3688
Cell: 610-331-7213
mskj@comcast.net
Web Reference: http://www.phillyreo.com
0 votes Thank Flag Link Sat Jan 28, 2012
j.......

Absolutely....getting a loan for the purchase of a foreclosed property can normally be accomplished easily. However, getting the selling bank to accept an offer that is not a "cash" offer may be a more difficult accomplishment.

Typically, in a transaction where you are the only interest in the property you will likely not have a problem. But in the case of multiple interest and cash buyers being involved, your financed offer may not be the favorable choice.

Good luck,

Bill
0 votes Thank Flag Link Sat Jan 28, 2012
Jalberto,

The most important consideration for ANY home and ANY buyer, is the buyers financial qualifications.

If we assume yours are fine, then... the second question is then home condition/what kind of loan.

If the home is in bad shape, then probably no financing is possible except for specific "repair" loans like an FHA203k loan, which require a buyer with stronger financial qualifications, AND a specific repair/update plan, generally through a licensed general contractor.

Your question is really best answered with a conversation, and if you'd like to contact me, glad to have a talk. I've done plenty of fixer uppers, with and without financing, As always the answer is in the details.

Best

John Leonard
Long & Foster Real Estate
610-742-9389
john.leonard@lnf.com
Web Reference: http://www.nicepahomes.com
0 votes Thank Flag Link Sat Jan 28, 2012
Yew you can have financing but what type depends on the shape of the property. If you would like me to go into further detail contact me and we can discuss your situation.
0 votes Thank Flag Link Sat Jan 28, 2012
Jalberto gave you an excellent answer, but he's in Oregon. We are in the Philly suburbs. How best can we help you?

Rob Hughes: Long & Foster Real Estate Inc.
(Associate Broker) (AB065650)
(Hughes Associates) (Realtor since 1987)

Office: 610-225-7400 x7438

Cell# 484-410-9765 (Preferred)

http://WWW.DELVALREALESTATEOFPA.COM
0 votes Thank Flag Link Sat Jan 28, 2012
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