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A Broker said "Stay away from foreclosure or HUD houses" if I have this type of FHA loan! Why?

I can not get FHA 203K because my credit score is ony 608. The lender let me borrow FHA insured loan; unfortunately, not FHA 203K. I understand that because 203k is uninsured loan. Now, I see another HUD house is required for FHA 203b insured loan with Escrow Amount. I have regular FHA insured loan I thought it was okay; nevertheless, the broker told me that I should stay away from HUD houses or any foreclosure house because regular FHA insured loan won't pay for it. She told me that I could only find the Individual Ownership House only. Can anybody PLEASE tell me why FHA Insured Loan is not qualified for the HUD house that accept FHA Insured Loan 203b with Escrow Fund? 10 points for best answer! Thanks for your help

Public Comments

1. Which broker is telling you this, the real estate or the mortgage broker? It sounds like the broker doesn't want to deal with the extra paper work and the additional time required to deal with an escrow hold back purchase. The FHA 203b just means it's an FHA 30 year fixed, this is not a special program like the 203k. A HUD owned home may be the best deal for you. In some areas HUD is offering to waive the 3.5% down payment requirement and allowing people who use FHA loans to buy with only $100.00 down. Like I said it sounds like your broker wants a fast easy closing and does not want to work with you to find the best deal for you.