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Bank owned homes and FHA or MSHDA mortgages – what Macomb County MI home buyers need to know.

July 9th, 2012 · No Comments · fha mortgages and first time home buyers, Searching homes for sale in Macomb County, tips for home buyers

Congratulations!  You have gone through the pre-approval process and now know that you can purchase a home using a FHA or MSHDA mortgage.    During your time gathering documents and working with your mortgage lender you’ve also been looking at homes online and found many that fit your budget and criteria.

There could be a problem though:   Your “list” of homes to view may be cut considerably, depending upon the condition of the homes.

This has been my (and my buyer clients) experience with bank owned homes (foreclosures) in Macomb County with FHA or MSHDA mortgages:

The homes that have been vacated and left without maintenance for months typically will not pass FHA or MSHDA health and safety standards.     The list of problems with these homes can be lengthy:

  • Roofs that don’t have a 3-5 year lifespan left
  • Heaving cement walkways or driveways (trip hazards)
  • Flaking and peeling paint on homes built before 1978
  • Missing components (furnaces, water heaters, plumbing, etc)

One thing I always tell my buyer clients when they are using an FHA or MSHDA mortgage:    HUD doesn’t care about “ugly”.   The paint and carpet and cosmetics won’t be an issue.  Health & safety defects will always be an issue.

As you are looking online for homes to view try to pull up as many photos as possible.  Often, the photos will give away the condition of the home.  If the home appears as if it could have many health or safety issues, then you are probably wise to bypass them entirely.  Nothing is more frustrating for a buyer than to view 10-12 homes in one day and have 8 of them be unacceptable to FHA or MSHDA.

Another tip:   Look for “normal” homes for sale (owner occupied or estate sales).      If repairs are ordered by your lender, often the seller will take care of them.  It’s one more negotiation that is much easier (and more successful) with a “normal” seller than with a bank or asset manager of a foreclosure.

Happy house hunting!

Kris Wales – a partner for your real estate needs in Macomb County MI
SEARCH Macomb County homes for sale
Contact Kris 586-536-5453

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Important copyright information: All photos were taken by Kris Wales. Do not copy and use photos for your own use, whether it be for personal or commercial purpose. All articles were written by Kris Wales. Once again, do not copy and use for your own purposes. Important disclaimer: Views expressed on the blog by the author and commenters do not express the views of Keller Williams Realty. All information contained is deemed to be reliable at the time of posting but not guaranteed.