Houston Foreclosure Types of Financing

When financing a foreclosed home the condition could be an important factor. If the home is in very good condition, traditional mortgage programs can probably be used. When the home is in need of repairs or maintenance, the financing may be more difficult.

We suggest that you plan for financing before you begin shopping. Consult with a licensed loan officer and ask for a free pre-qualification. Be sure to mention that you are considering a foreclosed property. In most cases the seller will require you to present a pre-qualified letter with your offer.

Here are some of the mortgage programs that are currently available:

FOR HOMES IN VERY GOOD CONDITION:

FHA – Up to $271,000, 3.5% or greater down, 620-640 minimum credit score, seller may pay your closing costs. Not for investor property.

VA – For qualified veterans, 0 down, 620 minimum credit score, seller may pay your closing costs. Not for investors.

Conventional – 3% to 5% down with a 660+ credit score, 20% down with a 620-660 score, seller can pay about ½ of the closing costs. Investors need 20% or greater down.

USDA – For homes in qualified rural areas. 0 down, 620 minimum credit score, seller can pay closing costs. Not for investors.

HUD $100 down - Qualified HUD foreclosures. 3.5% or greater down. 620-640 minimum credit score, seller can pay your closing costs. A type of FHA mortgage.

HOMEPATH – Qualified Fannie Mae foreclosures. 620-659 requires 20% down, 660+ requires 3% or greater down. Investors need 15%+ down. Seller can pay your closing costs.

FOR HOMES NEEDING REPAIRS OR MAINTENANCE:

HOMEPATH – Qualified Fannie Mae foreclosures. 620-659 requires 20% down, 660+ requires 3% or greater down. Investors need 15%+ down. Seller can pay your closing costs. No appraisal is required.

Fannie Mae HomeStyle Renovation – 5% or greater down. 700+ credit score required. Funds can be loaned for the home plus the cost of certain repairs.

FHA 403K – 3.5% or greater down payment required. 620-640+ credit score is required. Funds can be loaned for the home plus the cost of certain repairs

Programs can change and there are many conditions and rules that may apply. Please visit with a Texas licensed loan professional for up the most up to date information. A Houston area realtor that is experienced with the foreclosure sale process can also be a good source of information.

 

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