Are FHA loans available for REO, short-sale, foreclosed or pre-foreclosure properties?

Asked by Roger, Miami Gardens, FL Mon Oct 4, 2010

If so, will lenders be less enthusiastic about financing an FHA loan in these situations?

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Tammy Hayes, Agent, Port Charlotte, FL
Wed Oct 13, 2010
Let FHA Loans Help You
FHA loans have been helping people become homeowners since 1934. How do we do it? The Federal Housing Administration (FHA) � which is part of HUD � insures the loan, so your lender can offer you a better deal.
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Buying your first home?
FHA might be just what you need. Your down payment can be as low as 3.5% of the purchase price, and most of your closing costs and fees can be included in the loan. Available on 1-4 unit properties.
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FHA has a loan that allows you to buy a home, fix it up, and include all the costs in one loan. Or, if you own a home that you want to re-model or repair, you can refinance what you owe and add the cost of repairs - all in one loan.
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You can include the costs of energy improvements into an FHA Energy-Efficient Mortgage.
How about manufactured housing and mobile homes?
Yes, FHA has financing for mobile homes and factory-built housing. We have two loan products � one for those who own the land that the home is on and another for mobile homes that are - or will be - located in mobile home parks.
Ask an FHA lender to tell you more about FHA loan products.
Find an FHA lender
Need advice? Contact a HUD-approved housing counselor or call
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1 vote
Mon Oct 4, 2010
Lending institutions do not care whether you're buying a foreclosed home, a short sale or an ordinary resale. All you need to worry about is being qualified for a loan. When it comes to FHA, it gets a bit more strict here with the property condition. It can't be too distressed. It has to have all the things necessary for living in the property, such as water, electricity, stove, etc. And most REOs and short sales are in a decent condition and will be just fine when financing with FHA. If you're looking at a specific property that is severly distressed, you might want to consider FHA 203K programs that allows you to buy a property in need of work and finance the repairs through the loan.

if you'd like any more information and help figuring out the world of FHA and lending, give us a call, we'll be happy to help: 1-800-801-6080 ( deirect line) or email at

Andrew Ollick
Faith Home Loans
Latest Post: Naples Luxury Home on Fire
1 vote
Daisy J. Tun…, , Miami Gardens, FL
Sat Oct 9, 2010
Yes, FHA is available for the buyer's use. However, because most Realtor's are not aware of the power of the FHA 203K ( a single mortage, before it was a part of a 2 step). If more of us used it, we would be able to give retail buyers a chance to become owners that otherwise could not. Whereas, most of these homes end up in the hands of investors. Ultimately, the goal is to spread homeownership among the many, not to accomulate it in the hands of a few. My desire is that more Realtors take the time to introduce the FHA 203K to themselves and owner occupant prospects. A great financing tool for your box, it can increase your sales and your income tremendously.
0 votes
carlener par…, Agent, Apollo Beach, FL
Tue Oct 5, 2010
Hi Roger,

FHA loans can be used to purchase these types of properties as long as they meet the FHA requirements.

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Desari Jabbar, Agent, Stone Mountain, GA
Mon Oct 4, 2010
FHA loans are available for these properties as long as they pass an FHA appraisal. If they don't there are sellers who would consider doing repairs the lender has required to get the loan approved. I suggest that you find an experienced realtor in your area, preferably through trulia. She can assist you with finding a property that would qualify for an FHA loan.
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0 votes
Jose Morales, Mortgage Broker Or Lender, Lutz, FL
Mon Oct 4, 2010
FHA is available for all those scenarios but with additional conditions. If you are the buyer it would have to be owner occupied. If you are buying from an investor who recently bought the property(less than 90 days) we can still do the loan but there are additional requirements. That is not the case if it is owned by a bank.

Then there is the FHA rehabilitation loan which you can use for repairs or just improvements and roll everything into the loan provided you are getting the property for a very good value in the first place. If you buy certain HUD owned properties, we can offer $100 down FHA. That is correct, $100 down.

In addition to FHA,, there is also up to 95% financing for first time home buyers on conventional loans. And finally, you can also get a Fannie REO for only 3% down and get Fannie to pay up to 3.5% on closing costs.

As you can see there are many choices. We specialize in the South Florida area. Give me a call to discuss your options.

Jose Morales
Florida Mortgage Coach
0 votes
Fred Glick, Agent, Mountain View, CA
Mon Oct 4, 2010
FHA is OK, but only for owner occupied.

Also, if the place needs work, you can't go with a standard FHA, it will need to be an FHA 203k which helps pay for repairs.

Also important to pay attention to is that most condos are NOT FHA approved and the REO bank won't help you get it approved.

Interview real estate agents and find someone that knows their stuff.

Also, make sure you get preapproved for the mortgage before searching.

I am happy to help since I am licensed in FL.

Fred Glick
U S Loans Mortgage LLC
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