In this article we will break down what’s required for you to buy a short sale or foreclosure home with an FHA loan so you will prepared if you have found a foreclosure or short sale home in Southern California and you want to use your FHA loan to purchase it.
The Home Must Be Habitable
Even though we see short sales and foreclosures bought by house flippers all the time on television the truth is that when it comes to FHA loans you can only buy a short sale or foreclosure home if the property is deemed “habitable”.
Habitable means that you will have the ability to move into the home after you purchase it so if the property needs major work like, drywall, roofing, structural, foundation or other issues that need to be resolved before you can move in then that property will not be deemed habitable and you will have to use cash to purchase it.
Foreclosures & Short Sales
Remember that foreclosures and short sale homes are sold “as is” and this means that they may have been sitting on the market for months, or years, at a time so it’s very possible that the property won’t qualify for financing if it’s not habitable and ready for you to move in right away.
Keep in mind that if you use an FHA loan to buy a foreclosure or a short sale you may also qualify for a rehab loan which will give you the financing that you need to clean up the property and or renovate if it needs minor renovations after you purchase it.
Learn More about FHA Loans
To learn more about FHA loans or to view homes, for sale in Southern California, contact Fred Sed Realty today by calling us at (800) 921-9231 or connect with us online.