Are you in the marketing looking for a home and are thinking that can you buy a foreclosed home with an FHA loan? Then the answer is yes, you can. If you have an FHA loan, you are allowed by the FHA to purchase a home that is in foreclosure.
Is It Possible to Purchase A Foreclosure Using A FHA Loan?
Yes, it is possible. There are strict rules to buy foreclosed home, and the home should meet the FHA standards. Also, there are lessers benefits compared to a traditional loan.
The Requirements for an FHA Loan?
You must meet the requirements; else you will not be eligible to buy the property. Here are the details.
The Requirements Of The Borrower
- Credit Score: In most cases, loans are only sanctioned to those who have higher credit, but in this case, you are eligible for an FHA loan even if your credit score is low.
- Repayment Ability: You will need to provide relevant documents as there will be a verification held to ensure you are able to pay the debts.
- Become A Resident: Once the purchase is complete, you must shift to the new house. You will not be allowed to keep it as an investment or rent it out ahead.
Down Payment: You must be able to make a three and have half percent of downpayment.
What Are The Requirements For The Home?
- Should Be Evaluated: The property should be evaluated by FHA.
- Conditions: As per the FHA rules, the property should be in proper conditions, i.e., you should be able to live in it.
What Are Some Pros and Cons of Buying a Foreclosure With an FHA Loan
- You may get a good deal which is not possible otherwise. If you close the deal as a foreclosure, then chances are the cost will be less compared to doing it in other ways.
- Even if you have a low credit score, you have the possibility to own a property. This means that with a low credit score and at a lower price, you have the chance to close a good deal.
- The property must meet FHA’s requirements because the seller will sell the property as-is. If there are any repairs needed, they will have to be done by the FHA.
It’s absolutely okay to have a lot more questions when you are thinking that can you buy a foreclosed home with an FHA loan? And if you are not sure, do not worry about that. All you have to do is connect with Red Door Funding over email or a phone call; you can come to see us as well, and our specialists will be able to assist you. Call us at 832-539-1099 to speak with one of our specialists who will help answer and solve all your queries.