Question Details

Vicki Ohlert, Home Buyer in Miami County, OH

I want to know about bank property?

Asked by Vicki Ohlert, Miami County, OH Sun Jul 8, 2007

I WAS very vague with my question concerning FHA loans. Yes, I have a pre-approval letter in hand from a bank. My question is... can this type of loan be used on a bank owned property? What are the quide lines? What can I do about closing costs on a bank owned home? Are banks usually accepting of FHA and paying a portion of the closing costs?

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It depends. Every bank is different and even the asset managers are different. Could even be the houses are different. Many banks I've worked with, won't help with closing costs. Seems like they would just think about net amount to them, but that's not always the case. Also it could depend on the condition of the house. Many banks I've worked with don't want to do repairs. They'll occasionally make deductions or allow you to escrow allowances for repairs, but they don't want to invest or arrange the repairs. FHA loans can require the repairs be completed before closing so that could present issues. Often the listing agent can give you some idea of how that particular bank works.
Web Reference:
0 votes Thank Flag Link Mon Jul 9, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
As a former banker, I would recommend contacting the Asset Recovery Group in the bank to request information about the property. If the property has been foreclosed upon and is now owned by the bank, it would be known as an OREO property (orther real estate owned). There will be an individual at the bank that will be responsible for selling this property. I would advise locating that person.
The bank may also have information of properties that are coming up for foreclosure that may be of interest to you. These properties are still owned by the individual/entity that purchased the property. Any negotiation for these properties would be with the owner and not the bank.
Good luck in your endeavor.
0 votes Thank Flag Link Mon Jul 9, 2007
The following are acceptable financing instruments for purchasing HUD houses, or other bank owned property: Federal Housing administration (FHA) loans, Veterans Administration (VA) loans (subject to certain restrictions), conventional loans and cash.

List of government owned websites:…
0 votes Thank Flag Link Sun Jul 8, 2007
Vicki, it is more important that FHA lender approves the purchase. The bank selling the property is interested in any buyer, as long as the money is transferred at the close of escrow to their account. And assuming that your FHA lender approves the purchase, the seller will get paid at closing of escrow. It will become "a problem" of a new lender, as the old lender" will be (happily) out of the picture.

Am I answering your question? I am not sure if I got your question right.
0 votes Thank Flag Link Sun Jul 8, 2007
Artur Urbans…, Real Estate Pro in Burlingame, CA
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