Richard's Real Estate Thoughts - Chattanooga TN Mortgage Lender

HUD Foreclosure Purchase: $100 down FHA mortgage

HUD foreclosures can provide great home opportunities both for low down payment purchase and for future home equity. The properties are foreclosed homes which sold As Is, meaning the property condition may not good.

There are different classes for the $100 down program, generally based on the property condition and whether FHA will insure the new loan

Insurable means the property was acceptable to the FHA property inspector. This means that, according to the initial FHA inspector, a new FHA loan with $100 down should be possible. The FHA appraiser for the new mortgage still must pass the property condition and value.

Insurable with repair escrow means that the FHA property inspector identified required repairs that should cost less than $5000. This is the limit for an FHA repair escrow to be added to the new loan. With a repair escrow the purchase can be closed with money set aside for identified repairs.

Again, the actual required repairs are identified by the new FHA appraisal. See earlier posts for more information about FHA repair escrows.

Uninsurable means that the FHA property inspector identified required repairs that cannot be accomplished with a repair escrow and a regular FHA loan. Most likely the property would also be ineligible for conventional mortgages.

For these uninsurable properties, 203k renovation loans can be used. A renovation loan provides the funds for the required repairs. The purchase closes without the repairs started. The repairs are completed after closing with funds provided in the new loan. Please see earlier posts for more information about FHA 203k renovation loans.

Please call with questions. Experience with HUD foreclosures is important to ensure your loan closes smoothly and on time so that HUD contract extension fees can be avoided.


Thank you for visiting. This is the professional blog for

Richard Smith
NMLS# 184479 TN# 104002 Georgia Residential Mortgage Licensee, GA#28928 

Conventional, FHA, FHA 203k, HUD $100 down purchases, VA,

Rural Development (USDA), THDA and Jumbo Loans


Lending in Chattanooga, Tennessee and Georgia for over 20 years.

Fairway Independent Morgage Company

Cell phone: 423-280-0345 Email:  Richard.Smith@FairwayMC.com

Visit my website to inquiry about a home loan.

This blog represents the opinions of Richard Smith. The posts and comments written on the blog do not represent the opinions or positions of Fairway Independent Mortgage Corporation.

 
Comment balloon 0 commentsRichard Smith • October 04 2016 10:00AM
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