FHA Financing For Bank Owned Real Estate
Buying Oakland Real Estate
FHA financing has made it's comeback, and it's currently the prevalent form of financing in todays market, with over half of all transactions closing using FHA backed financing. The guidelines for FHA financing are somewhat strict, in an effort to only qualify people who can truly afford to take on the mortgage they are applying for.
One of the biggest differences with FHA financing is the appraisal review. Appraisals for FHA loans are scrutinized much more, often resulting in the underwriter requiring additional comparables to justify the value of the property. If the appraiser has difficulty finding the additional comparables, they may not accept the appraisal. With so much Bank Owned real estate on the market, prices are softening which can make it difficult for the appraiser to justify the value of the home. For this reason, a lot of the Banks frown on offers that use FHA financing. So if you are going FHA, and someone else submits an offer with conventional financing, the Bank may end up going with the offer using conventional financing...even if the purchase price is less!
The condition of the property is another issue. Much of the Bank Owned real estate on the market needs cosmetic work, which doesn't help the appraised value as well.
This doesn't mean it's impossible to do, it just means that the property must "qualify" just as the borrower must.
Date: Wednesday, June, 25th 2008 @ 12:04:18 PMViews: 322
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