FHA and Foreclosure

A home in foreclosure must meet certain guidelines to qualify for FHA financing. FHA loans are intended for owner occupants, not for investors. The FHA prevents borrowers from using this loan program to purchase an investment property. As a borrower, if you buy a foreclosed home with an FHA loan, you must move into the home within 60 days of signing the loan documents and live it in for a majority of the year. A home in foreclosure must meet the same habitability standards as a traditional, non-distressed home sale. The home must be structurally sound and free of health and safety hazards for its occupants. An FHA-approved appraiser will inspect the home and report its condition to the lender to make sure it meets FHA guidelines.