If it doesn't, there may be another answer. FHA has a program for buying homes that don't qualify and rehabilitating them so they do. Ask your Realtor, lender or loan broker about an FHA 203k loan. These are for people who want to buy a home for, say $100,000 that needs $30,000 work. FHA will loan actually loan a total of slightly more than $130,000. It's a little complicated so make sure your lender has done 203k loans before and you should be OK.