As first time buyers are out shopping for discount homes in Austin, one question I get asked is can they use their government loan to buy a foreclosed home?
In simple terms, and FHA loan is a mortgage insured by the Federal Housing Administration. They differ from conventional loans as they require lower down payments (currently 3.5%) and the appraisal process is stricter than with a conventional loan. For example, the FHA will not insure a loan in Texas if the HVAC isn’t operational, there are broken windows or there are missing electrical fittings.
So can you buy a foreclosed home with an FHA loan? Often the answer is yes! If the home is a HUD home at least you’ll know before you put in an offer. HUD want to create home ownership opportunities, and so they send out an FHA appraiser before they put their homes on the market.
If you look at the Austin HUD Home site, you can see whether a home is marked “insured” or not. If it is – you can use a regular FHA loan to buy it.
For non-HUD homes – conventional foreclosures – the situation is not as clear for a consumer. If the home is in good condition, then you may be able to use an FHA mortgage. For conventional foreclosed homes, you need to get advice from a professional to see if the home may be elligible for the type of financing you have.
An Austin Realtor is a HUD approved Realtor ® in Austin. Get in touch to find out if a foreclosed home is right for you – 512 215 4785.
0 Comments