Upcoming Foreclosures - Can I get a $50,000 loan for a property that is selling for $35,000 but appraised and worth $55,000?

Can I get a $50,000 loan for a property that is selling for $35,000 but appraised and worth $55,000?

I have been pre-approved for an FHA loan however my lender does not issue loans for anything below $50,000. The townhome that I am purchasing is a foreclosure so they are selling it cheap for $35,000 however according to tax appraisals the townhome is worth $55,000. My lender has a maximum 96.5 LTV (whatever that means) What I would like to do is get the $50,000 loan since they will not lend me anything less than that and use the extra money to repair the townhome. Is that possible? I am in the State of Texas so those rules/ laws would apply.

Public Comments

You might be able to obtain two loans -- 1st one to purchase (about $33,500). 2nd one to rehab (Do they still offer "Title 1" FHA loans?)
If the home appraised at $55,000.00 a 96.5% loan to value (LTV) would be $53,075.00, which means that you should qualify for a $50,000.00 loan. However, before you run out and get the loan, make sure you can meet the the full obligation. The loan payment to satisfy your lender will only include principal and interest. It will not include taxes and insurance, which will be added to your monthly payment. In my case, that is about $200.00 a month. Remember, just because you qualify for $50,000.00 loan, doesn't mean you have to borrow that much. Look around for a lender that meets your requirements. The market will have a lot of deals in 2009.
You can not get a loan for more then the purchase price. BTW, tax appraisals have nothing to do with actual value. Your appraised value will be differant.