Foreclosure | NC FHA Expert

Purchasing FHA Foreclosures

FHA is making a temporary move which will make it easier for folks who want to purchase FHA foreclosures. In a release last week HUD announced that it will temporarily waive a 90 day restriction it held on those selling HUD foreclosed property.

The restriction had been in place to reduce ”flips” a fraudulent practice that strips a home of its equity before being quickly resold at an inflated price. Under most circumstances, the resale is to an unsuspecting buyer, especially if that buyer is not represented by a licensed Realtor.

In their statement, HUD said:

“In an effort to stabilize declining home values in certain neighborhoods.. announced a temporary policy that will… allow for the immediate sale of vacant foreclosed properties.

For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.”

Hud further stated, “that many foreclosed properties remain vacant for months, inviting vandalism and reducing values of surrounding homes. To address that sizeable inventory, lenders have hired companies that specialize in the marketing and disposition of foreclosed homes. It’s reasonable and appropriate that these firms have the ability to sell the properties to borrowers using FHA financing.”

We normally recommend FHA 203k financinging for these properties! For more information – please follow this link. If you have questions about qualifying for one of these properties, please contact Steve and Eleanor Thorne at Connect With Us on Facebook in Raleigh, NC 919-649-5058

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FHA Repair Requirements

FHA Repair requirements Homebuyers are looking for a deal – and sometimes you might think that purchasing a “fixer-upper” might be the best way to go!

The problem is that many sellers, including banks holding foreclosed property, might not want to accept an FHA borrower? Why? Because FHA will not take a property with a paint job like the one shown here. If you were purchasing this property, the exterior repairs would need to be done PRIOR to closing.

Most homebuyers do not want to sink money into a property they haven’t purchased yet – leaving the repairs for the seller (who often doesn’t have a ton of cash on hand, ergo this is why they are selling!).

fha loans cary

FHA did make some moves earlier this year that lead some to believe that it’s EASIER to get financing with FHA on an existing home… and indeed, if you are purchasing a home in fairly good shape the appraisal process is easier! Look through this list with your realtor and we believe that you will agree that a Seller of a property in reasonable repair should accept a contract with FHA financing for the borrower.

Examples of MINOR property conditions that no longer require AUTOMATIC repair for existing properties are:

Examples of Missing handrails;

Cracked or damaged exit doors;

Cracked window glass;

Minor plumbing leaks (such as leaky faucets);

Defective floor finish or covering (badly soiled carpeting);

Rotten or worn out counter tops;

Crawl Space with debris or trash;

Defective paint surfaces in homes constructed Post 1978

Examples of tests that may no longer be REQUIRED:

Wood Destroying Infestation Report-required if there is evidence of READILY OBSERVABLE ACTIVE infestation;

Well (Individual Water Test)-Required if there is knowledge that well water may be near sources of contamination;

Septic Test-required if evidence of system failure.

Don’t be confused when you hear stuff about FHA being a bad program! Get the FACTS! You MIGHT need an FHA 203K home improvement loan – ask us for details!

For more information on FHA MORTGAGES, contact Steve and Eleanor Thorne, The FHA EXPERT in NC 919-649-5058 at Connect With Us on Facebook,