John Burke

Hi Mind,

Unfortunately, I don't share the optimism of the agents that have responded.

When was the foreclosure completed?

@ Josh, IL is not a community property state so the non purchasing spouses credit score and debts do not come into play with any of the government back mortgages (FHA, VA, USDA)

Underwriters will do a public records research and the Notice Of Default will come up with your name on the title to the home that has the NOD filed against it. Strike 1

Strike 2

The foreclosure will come up on the mortgage application when you fill out the housing history (it asks if you own or rent) and in the declarations section of the application it will ask if you've had ownership interest in a home in the last 3 years (you have since you're on title) and what type of property, primary residence, 2nd home or rental property. So when you indicate in the housing/address history that you own (which you do since you're on title) the underwriter will be required to find out what you intend to do with that property, retain it, rent it out or sell it. When the underwriter sees the declarations section indicating that you've had an ownership interest in a primary residence in the past 3 years, they're going to start asking questions and it will come out that the home was foreclosed on.

Unless you meet the "seasoning" requirements for eligibility after a foreclosure, I don't think your chances are too good for making it through the underwriting "gauntlet" with an approval. - Tue May 22, 2012

Hi Paramed,

It all depends on the volume of files that the USDA/RD office is dealing with. You could be looking at anywhere from 24 hours to 2 weeks. - Tue May 22, 2012

Hi Regina,

Most listings will give you an indication of whether or not the property will pass VA or FHA appraisal requirements by saying things like cash or conventional financing only, fixer upper or sold as is.

Here is an excerpt from the VA Lenders Handbook.

Hazards
The property must be free of hazards which may

• adversely affect the health and safety of the occupants
• adversely affect the structural soundness of the dwelling and other improvements to the property, or
• impair the customary use and enjoyment of the property by the occupants.

Defective Conditions
Conditions which impair the safety, sanitation, or structural soundness of the dwelling will cause the property to be unacceptable until the defects or conditions have been remedied and the probability of further damage eliminated. Such conditions include but are not limited to

• defective construction
• poor workmanship
• evidence of continuing settlement
• excessive dampness
• leakage
• decay, and
• termites.

Appraisers must look for and report evidence of wood destroying insect infestation, fungus growth, and dry rot in addition to any VA requirement for an inspection of the property by a wood destroying insect inspector.

Lead-Based Paint
Lead-based paint constitutes an immediate hazard that must be corrected, unless testing shows that lead is not present in the paint at a level above that permitted by law.

Appraisers must

• assume that a defective paint condition (involving cracking, scaling, chipping, peeling, or loose paint) on any interior or exterior surface of properties built prior to 1978 involves lead-based paint
• clearly identify the location of such conditions, and
• recommend correction.

Any defective paint condition identified must receive adequate treatment to prevent the ingestion of contaminated paint. Either

• the surface requiring treatment must be thoroughly washed, scraped, wirebrushed or otherwise cleaned to remove all cracking, scaling, peeling, chipping and loose paint and then repainted with two coats of a suitable nonleaded paint, or
• the paint shall be completely removed or the surface covered with a suitable material such as gypsum wallboard, plywood or plaster before any painting is undertaken if the paint film integrity of the surface needing treatment cannot be maintained. - Tue May 22, 2012