FHA loan for foreclosed property

An FHA loan can be used for any property that is in acceptable condition - the same holds true for conventional loans. If the home is in fairly good condition then you could proceed either way. Things that would prevent financing are: wood rot, foundation issues, exhausted roofing, water damage, broken or missing windows, broken or missing toilets, missing sinks, mold or defective bathroom tile. This is just a partial list but consider anything that would be considered a health or safety issue a non-lendable property. Special loan products can be utilized for defective or damaged properties. It is best to speak to a professional experienced lender if you have questions. Just being a foreclosure does not prevent you from securing a FHA mortgage. I do these loans all the time.

FHA will require that the home is fit for habitation. Part of the Appraisal process is to look for "Health and Safety" items. Things like broken windows, missing sinks, exposed electrical or plumbing, etc. If the home has little or no damage or if the damage is mostly cosmetic, then it shouldn't be a problem. If the home has significant damage, it is still possible to buy FHA using the 203(k) rehabilitation loan. This loan allows you to finance most or all of the repairs, and even some desired but not required improvements. I have done kitchen remodels, new roofs, new baths, new carpet/flooring and other improvements wanted, but not required by FHA. I would recommend that you find a local Mortgage Banker or Mortgage Broker to get pre-qualified for a loan. Make sure they a certified for FHA and specifically the 203(k) product. Good luck

You can purchase any home FHA, but there are guidelines that need to be adhered too.. if it's being sold by a bank, not a problem, but if it was a foreclosure that was purchased by an investor who fixed it up and is now selling it, then certain guidelines have to be followed. As far as condition is concerned, there used to be a big difference between FHA and Conventional appraisals, however today there is very little difference. Property deficiencies are looked at on both types of loan appraisals, and any repairs noted that have to do with safety and or health concerns will have to be addressed on both types of loans. WilliamAcres.com