Buying Foreclosure Homes with FHA Financing in Tucson

July 15, 2009 | By Kelley Koehler | Filed Under Loans and Financing, Tucson Foreclosures and Short Sales 

fix up home in tucson What home buyer doesn’t want a bargain? 

More and more often in this market, I’m coming across first time home buyers looking for that special foreclosure deal – and want to use FHA financing.

FHA is an attractive option for people who intend to live in the house they purchase, because it only requires a 3% down payment.  Lots of home buyers – especially first time home buyers – take advantage of programs like FHA to get into a home with low down payment.

However.

Traditional FHA financing requires that the house be in good enough condition to qualify for that loan.  And quite honestly, so many of the foreclosed homes in Tucson that I see aren’t in good enough shape.  I’ve participated in enough FHA financing deals that I’ve got a pretty good eye for what will and what won’t pass muster.

There’s good news though – but expect to jump through a lot of hoops.

FHA has a fix-up loan program, the FHA 203k, where you can finance fix-up costs.  The funds for repairs are placed in an escrow account and are released in draws as the work is completed.  And as with all FHA loans, they can be used on 1-4 unit properties that the owner will occupy.

Those loans aren’t nearly as simple, so be sure you’re working with people that understand the process!

More resources from the HUD site:

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