Although they have not been as available (thankfully) this year as in years past – there are still some really good deals available on homes where the Owner is underwater. You CAN use your VA Loan benefits to purchase a Short Sale Home.
Those transactions are called “Short Sales” and while it’s true it can be a longer process (because the Seller and the Bank have to agree on everything), they can still be a cheaper way to get a home… and Yes, short sales are eligible for VA-backed financing, VA Loans can also be used for foreclosures and Bank Owned homes too!
How To Buy A Short Sale Home With VA Loan Benefits
It’s important to remember that the VA Loan program underwriting is slanted to PROTECT the Veteran. Because of this, VA Loan underwriting has stricter appraisal requirements regarding a home’s condition than conventional lending programs do. With a Short Sale, in particular, this is an important fact because “short-sale sellers” are generally typically have no motivation (or money) to make repairs, and many of these homes need improvements and updates.
VA Loans also have some restrictions on what costs a Veteran can pay in relation to a new loan, especially if you have an appraisal problem.
That doesn’t mean you shouldn’t pursue a short-sale home using a VA Loan, especially if you’re getting a great deal on your “ideal home” But we would definitely strongly suggest that you go into this type of transaction with the BEST Real Estate Buyer’s “Team” you can find. Why? Because Short Sale transactions are tricky – they take patience, and knowledge to make them come off without much of a hitch… and you want to protect both your Earnest Money and be aware of all issues that can come up with Due Diligence!
If you have questions about the Steps to Home Ownership, first time home buyer programs, or specific concerns about buying a house in NC – please call Steve and Eleanor Thorne NC’s Mortgage Experts 919 649 5058 We offer the best rates, and we would love to help you buy a home in NC!