How to Purchase a Foreclosed Home With a VA Home Loan
Obtain a Certificate of Eligibility., Talk to an approved VA mortgage lender., Find a real estate agent., Look at VA foreclosure properties., Determine if the VA loan will cover the cost of the house., Have the home appraised.
Step-by-Step Guide
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Step 1: Obtain a Certificate of Eligibility.
The VA provides a specific eligibility document to veterans who may apply for a VA loan.
Complete Form 26-1880 and send it to the VA at the address provided.
You will not be able to apply for a mortgage under the VA loan program without this Certificate of Eligibility. -
Step 2: Talk to an approved VA mortgage lender.
Even with VA loan eligibility, you will still need to meet acceptable income and credit standards.
Fill out the application forms provided by the lender.
You will be approved for a specific dollar amount.
If your loan application is declined, the lender will tell you why. , Use a local agent or broker in your area who has a good reputation.
Make sure the agent understands you are looking for VA foreclosure homes.
Share all the information you can with your agent, including features you would like in a home, the budget you can afford, and the areas you would like to live near. , The Multi Listing System (MLS), used by real estate agents and brokers, has VA foreclosure homes listed in your area.
You can also check out the website of the property management company that market the properties.
Ocwen Federal Bank is the name of the company (see resources for website). , The basic veteran's entitlement is $36,000.
Lenders will multiply that amount by 4, to come up with a maximum loan amount of $144,000.
This is the amount you may borrow without a down payment.
If the home you want to buy costs more than $144,000, you may qualify for an additional entitlement of up to 25 percent of the Freddie Mac conforming loan limit.
That loan limit changes annually, so check with your lender on how much extra money you may be able to borrow. , The VA will require an appraisal of the home you intend to buy.
This is not an inspection, rather a determination of the property's value.
You will be expected to pay for this appraisal. -
Step 3: Find a real estate agent.
-
Step 4: Look at VA foreclosure properties.
-
Step 5: Determine if the VA loan will cover the cost of the house.
-
Step 6: Have the home appraised.
Detailed Guide
The VA provides a specific eligibility document to veterans who may apply for a VA loan.
Complete Form 26-1880 and send it to the VA at the address provided.
You will not be able to apply for a mortgage under the VA loan program without this Certificate of Eligibility.
Even with VA loan eligibility, you will still need to meet acceptable income and credit standards.
Fill out the application forms provided by the lender.
You will be approved for a specific dollar amount.
If your loan application is declined, the lender will tell you why. , Use a local agent or broker in your area who has a good reputation.
Make sure the agent understands you are looking for VA foreclosure homes.
Share all the information you can with your agent, including features you would like in a home, the budget you can afford, and the areas you would like to live near. , The Multi Listing System (MLS), used by real estate agents and brokers, has VA foreclosure homes listed in your area.
You can also check out the website of the property management company that market the properties.
Ocwen Federal Bank is the name of the company (see resources for website). , The basic veteran's entitlement is $36,000.
Lenders will multiply that amount by 4, to come up with a maximum loan amount of $144,000.
This is the amount you may borrow without a down payment.
If the home you want to buy costs more than $144,000, you may qualify for an additional entitlement of up to 25 percent of the Freddie Mac conforming loan limit.
That loan limit changes annually, so check with your lender on how much extra money you may be able to borrow. , The VA will require an appraisal of the home you intend to buy.
This is not an inspection, rather a determination of the property's value.
You will be expected to pay for this appraisal.
About the Author
Angela Kim
A passionate writer with expertise in home improvement topics. Loves sharing practical knowledge.
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