Home Buying in 90034>Question Details

Brett Frankl…, Home Buyer in 90034

Can I use a FHA 203(k) loan for a foreclosure?

Asked by Brett Franklin, 90034 Mon Apr 6, 2009

I'm a first time buyer, maybe going to get an FHA loan. Since foreclosures are sometimes in a "fixer" condition, can I use an FHA203k loan to purchase one? Can I use a standard (non 203k) loan for one? Thank you.

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Brett, you should be aware that FHA loan requirements are more stringent regarding property condition than say, Fannie Mae. When buying a home using FHA financing be forewarned that specific property conditions must be met. For example: during the home inspection the inspector discovers the AC/HTG unit is inoperable and cost to repair is $4000.00. Generally speaking a foreclosed home is sold in an "as is" condition and the owner (usually a bank) will not agree to repair it prior to close. So FHA say's NO to the financing request unless YOU agree to pay upfront to repair the inoperable unit. DO YOU HAVE THE MONEY? is usually the first circumstance to be overcome. Do you want to put that money up front and risk the possibility (however remote) that your loan doesn't close and you are out the money? This is just ONE expample of the pit falls involved with REO's and FHA financing. There are many others. If you are not currently working with an agent I would like to offer my services as a buyer's agent to walk you through the minefield of buying in today's market. Amerimac Real Estate Services offers the buyer a credit of up to 50% of the seller paid commission at close of escrow. This could be as much as $6,000.00 on a $400,000 purchase. Plenty of money to fix that heating unit! Feel free to contact me at: MailTo:wallace@AmerimacRES.com or http://AmerimacRES.com for further discussion.
Web Reference: http://AmerimacRES.com
1 vote Thank Flag Link Mon Apr 6, 2009
Dear Brett:

The FHA 203(k) program can be used to accomplish rehabilitation and/or improvement of an existing one-to-four unit dwelling in one of the following ways:

· To purchase a dwelling and the land on which the dwelling is located and rehabilitate it.

· To purchase a dwelling on another site, move it onto a new foundation on the mortgaged property and rehabilitate it.

· To refinance existing indebtedness and rehabilitate a dwelling;

To purchase a dwelling and the land on which the dwelling is located and rehabilitate it, and to refinance existing indebtedness and rehabilitate such a dwelling, the mortgage must be a first lien on the property and the loan proceeds (other than rehabilitation funds) must be available before the rehabilitation begins.

To purchase a dwelling on another site, move it onto a new foundation and rehabilitate it, the mortgage must be a first lien on the property; however, loan proceeds for the moving of the house cannot be made available until the unit is attached to the new foundation.

In order to discuss in further detail, the particular circumstances of your situation, I suggest you contact a direct FHA lender. I can provide you with a referral to an excellent young man I do business with on a regular basis, in fact, he is the dedicated representative for my company at the lender. His contact info is as follows:

Mr. Houtan Hormozian
American Guardian Home Loans
(949)242-5215
hhormozian@amguardian.com

Good Luck and Happy Hunting!!!
Web Reference: http://www.crestico.com
1 vote Thank Flag Link Mon Apr 6, 2009
I believe you can use the standard 203k loan, but the property still needs to fit the very restictive FHA criteria in regards to condition and appraisa.
Joey Sacavitch
323-896-5869
Keller Williams Wilshire
jsacavitch@kw.coml
Web Reference: http://joeysellsla.com
1 vote Thank Flag Link Mon Apr 6, 2009
Yes!

Curtis D. Harris, CGREA, REB, FHA203K Broker Agent, Southern California, 310.337.1973
0 votes Thank Flag Link Wed Oct 28, 2009
Yes you can do FHA. If it is a condo and the building is not FHA Approved you can get spot approval. This might be better than FHA for you!
The City of Los Angeles Housing Department (LAHD) will offer purchase assistance financing to eligible low- and moderate-income homebuyers seeking to purchase a foreclosed home in an NSP Priority Area in the City of Los Angeles. LAHD provides assistance in the form of a deferred loan for purchase assistance (down payment and closing costs) and rehabilitation funds (if the property requires repairs).
More info you can email or call me
Thank you!
0 votes Thank Flag Link Sat Apr 11, 2009
Yes, you can use the FHA 203k on any property that need rehab & repairs. There are two versions of the 203k, one up to $35k and another if more than $35k is needed. Feel free to contact me to find out the differences or any other questions regarding loans or financing...Marvin@Marvinloans.com

Good luck to you.
0 votes Thank Flag Link Mon Apr 6, 2009
Hi Brett,

Sure you can use an FHA 203K loan to purchase a forelosure or other property. The key is to find an experience lender who has done enough of these loans to do a good job. I have a couple of lenders I'm happy to refer to you and I just wrote an offer on a foreclosure with this exact loan.

Best Regards,


Grant Linscott
Keller Williams Realty
323.333.6222 cell
grantlinscottproperty@gmail.com
0 votes Thank Flag Link Mon Apr 6, 2009
Yes. And you're on the right path. The FHA 203(k) loan is for rehab lending, which a lot of foreclosures need.

The 203(b) loan is the "standard" FHA loan everyone knows and loves. It can also be used on a foreclosure, provided the property is currently safe and liveable.

In fact, if you buy a HUD home, you can finance it with either FHA 203(b) or 203(k) and just a $100 down payment.
0 votes Thank Flag Link Mon Apr 6, 2009
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