Buying A Home

[luis_corado]

 I wanted to know if I could use a VA loan to buy a home that is owned by a bank, foreclosed, etc.  If  yes please provide me with the specifics.  Also, I've heard of a federal grant of $8000 for first time home buyers, is this still applicable and if yes what is the deadline and paperwork I need to satisfy? 

[mlombardo]

Luis;

You can use a VA loan to purchase a foreclosed property from a bank or anyone else for that matter.  As far as the $8000 grant you are talking about, I believe you are referring to the tax credit that the government was giving, unfortunately that credit expired on April 30th.  I would consult with your mortgage professionals to see if there are any other grants available inyour particular area of the country, that may not be available in other parts.

I hope that answers your question.

[Melissa Schnell]

Hi Luis,

The $8,000 Homebuyer Federal tax credit that you mentioned expired for most individuals... but you may still be eligible until April 30, 2011 if you are a federal employee or member of the military who has served outside of the U.S. for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010. Given that you mentioned obtaining a VA loan... you may fall into this category. I am not a tax advisor so that is something you would want to look into if you think you may qualify.

Here's a link to the IRS website that specifies the rules of eligibility:

http://www.irs.gov/newsroom/article/0,,id=215594,00.html

Hope this helps!

[Bruce Forge]

Luis,

The VA question is already correctly answered for you.  The key to using that loan with a bank or foreclosure is the condition of the property you want to purchase and the lender you choose to provide the loan.  VA loans require that any property involving a VA loan meet certain standards.  Your lender or your Realtor should be able to help you with this.  Also, many sellers fear selling to VA buyers as they believe (usually incorrectly) that these loans are complicated and take an extra long time to close.  You help solve that problem by working with your lender to have your application completed, credit approved, asset verified, certificate of eligibility in hand, so the only open questions should be does the property meet the required standards for VA and can the seller deliver clear marketable title.

The federal $8,000 tax credit is history now.  However, many communities offer assistance programs for homebuyers in the form of grants, financing assistance, various credits, silent seconds, and interest advantages.  These vary from community to community and county to county.  Use the Internet to get an overview for your location by searching for housing assistance programs in "city, St" on Google.  Then contact the program administrators for the ideas that interest you.  Again, a good loan officer or Realtor may be able to help you in this area as well.

For example, one of my clients qualifies for a new roof installation here in Orange County through a county grant program.  This will save him perhaps $5,000 to $7,000 to have the old roof removed, a new fire resistant roof installed, and all via a grant that does not have to be repaid.

Warmest regards,

Bruce Forge

Orange County, CA  Zip Agent

[Chris]

The $8,000 tax credit for new home buyers is not over.  The cut-off was April 30th for a ratified contact and June 30th for the closing.

As for the Bank Foreclosure, it depends in what shape the foreclosure is in.  The VA and FHA is used for purchasing a residence that you will make your primary residence.  In order words, you would live their full time, receive your mail there and use for your IRS returns.

Now even if this home will be your primary residence, it must be in move-in condition.  Meaning, if you have to put in new walls, new plumbing, new electricity, etc..., you can not buy it with a VA loan.

Since the VA is financing 100% of your loan, they want to make sure they can quickly resell in case you default on your loan.

How do you find out if it is VA eligible?  Ask your buyer agent to find out for you.  He/She may have to contact the listing agent if it is not on the listing.

Hope this helps and good luck!

Sincerely,

Chris