I recently had an offer on a foreclosure property accepted  where the buyers used FHA. I think it's important to look closely at condition of the home before making an FHA offer on any property including checking the permits.  

FHA requires property to meet ALL health and safety code violations. Bank will NOT do any repairs to meet this. Bank is going to look for the slam dunk easy deal to close. A buyer with larger down payment and conventional loan approval has better chance of closing. Why you ask -someone with 3.5 % down may not have ability to pay more down if appraisal comes in low.  Look into FHA 203k.  How is water heater strapped? Are utilites turned on? All appliances in ? Loans are available with 1 year after short sale 15% down no MI rate is high. You must be perfect on housing payments (rent or mortgage) AFTER the short sale. 

Positive at ya!

When dealing with banks, it helps to remember they have NO emotional ties, it's strictly numbers to them

I buy a lot of foreclosures, never for asking price though, and I do find that conventional financing would never fit in with the hoops that must be jumped through.  I have a business line of credit that allows a lot of flexibility.

Denise Amara - I am sure you have a positive update by now....

Good Luck.

I have not seen a foreclosed home that will qualify for a FHA loan in years!

FHA has more stringent requirement on code, structure, termite clearance.

Hope  you get the property.

FHA buyers won't usually have the ability to remove the appraisal contingency or have the funds needed to pay over the appraised value.  FHA Appraisers can demand the seller make repairs in order to do the loan.  Conventional buyer can have a higher credit score and more funds so they may have less canceled transactions.

If the condition is not an issue, there shouldn't be a problem with FHA.  That said, FHA does unfortunately have a bad rep for really no good reason.  Best of luck with your offer!

It's more of a why you should care about the different loans that are out there with the different criteria and using that information to best to serve your client's goals. Contact the lender for more information especially the FHA criteria on the condition of prospective property. I agree with Inna Ivchenko.

Wishing you the best with the offer and of you learning more about FHA loans!

Depends on the condition of the property, but in my experience, banks are perfectly fine with FHA ( unless you ask too much and for too long term). 

They normally do not meet fha rules for up keep.

Because the guidelines and terms are different, most sellers prefer a Conventional loan over an FHA.

Good luck; you will most likely be up against cash investors. These are getting tougher for owner-occupied buyers.

Good luck.

++++++positive thoughts. :0)

Banks probably can't sell some of the FHA mortgages. Good luck.

done!

The minimum property standards worry some sellers.

Good luck and while most of my transactions are cash or conventional, I have never had an issue with an FHA loan.

FHA and bank owned homes mix like oil and water. The bank wants a sure sale, wont fix anything and wont re-negotaite. The FHA appraiser and underwriter will want the home to be completey fixed, no issues and bank owned homes are not always "all fixed". FHA will take their time wth appraisal, underwriting and decisions while banks want quick closings. 

having done mortgages prior to real estate the reason a bank prefers conventional or cash is because they are not willing to correct or fix what the lender may require.  FHA/VA etc... all pretty much want to make sure the house can be livable.  It can be ugly but there are not structural issues/safety issues or santitation issues. That's not to say they won't consider the offer because I have seen some banks do minor fixes. Good luck!

That is not true at all - they don't care but they will take a conv over fha because of the appraisal issues.

You go girl.

YOU ROCK!

1. Assurance of closing.
2. Fewer hoops to jump through
3. Greater potential of conventional buyer protecting seller from appraisal.
4. Possible marginal buyer. (You can remove this perception by what is contained in the purchase agreement)
5. NOTE: it is not banks who prefer conventional...it it EVERYONE.

Good luck.

As far as type of financing, the condition of the property as well as length of time on the market and other competing offers will come into play.  

FHA appraisals could require repairs and foreclosures are sold "as is/where is."

Wishing you the best on your offer!

Denise, we all prefer conventional loans, but if there's nothing else on the table, we advise out clients to say yes.  Good luck on yours - may you be the only offer!

The truth is they prefer cash but I wish you lots of luck. You never know. I sold a foreclosure a couple of months ago and it was accepted on FHA and closed with no problems.

The FHA Appraiser is the potential deal-killer in this transaction.

Go to a credit union or two or three....foreclosures and fha usually don' t mix

I just closed on a foreclosure that was VA and VHDA.

We've done both, however, many of the foreclosures are not FHA insurable do to poor conditions.  Not sure if that is the proper wording, but that's what the foreclosure listing agents in our area type in the agent comments on the MLS.

Most sellers I've dealt with prefere conventional offers versus FHA or VA.  There are less hoops to jump through and a home that needs work may not qualify for FHA or VA.