Upcoming Foreclosures

Can you use government grants on a house in foreclosure?

My boyfriend and I want to buy our first home and know that there are a few programs out there that will help us out with the closing costs or a better interest rate. We also know there are programs available from the government, as well as our state, that offer free grant money for homes. But would we be eligible for these incentives if we want to purchase a house that currently is in foreclosure/pre-forclousure? We live in Florida if that helps . . . Also, would we look for asisitance in the county we live in or the county we plan to moving to? Thanks!

Public Comments

1. You can use the housing authority, neighborhood grant and FHA programs. There may be some constraints, because some of the programs require the sellers to fulfill some requirements, which the banks that own the foreclosed properties probably won't do. For instance, most if not all foreclosed properties sold by banks are sold "as-is". They will do no repairs. If the inspection shows any repairs that the banks insist on (usually they need a clear roof inspection and no live termite infestations), they will need to be made by you - and sometimes you have to pay for them before closing! Not smart. There may also be time constraints - most banks do respond quickly to offers and will allow you the 45+ days that some of these programs can take, but make sure how long it will take to close before signing any contracts. Some programs take even longer; banks who own the properties sometimes impose a fee for any day past the original closing date if you don't close on time. Some banks will also not give back any money for closing costs, etc. It's harder to negotiate with them and sometimes it's "my way or the highway." Some have 14-page addendums to the contract. If you are getting an FHA loan, they have rules too - and sometimes the two sets of rules won't match. I know FHA requires a few addendums to be signed by the Seller as well, so make sure whichever bank owns the property doesn't have a problem with that. That being said - there are some properties in good shape in foreclosure, especially the newer homes. And some good deals - I am finding that properties that go back to the banks as REOs (Real Estate Owned) are currently the best deals (rather than the pre-foreclosures or even the short sales). By the way, properties that would require a "short sale" can take a REALLY long time right now (I've been working on one for over 90 days), so I would avoid those if you have a deadline to meet. For your second question, you would need to go to the county that you want to move to.
2. Yes. The assistance programs don't care what kind of house you buy. Be wary of one thing. Some of the programs insist that everything in the house be fixed before you buy it. The one rule of buying repo's is that they won't fix anything...that is why the prices are so low..