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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. First, you can get a FHA uninsured loan with 600 the difference is the amount down. Most credit unions will work with you on this. You are probably using a predatorial lender.
2. FHA loans are a pain in the butt but really nice for first time home buyers. They are very picky about the home you choose to purchase though. It's almost as bad as a VA loan. Usually on a HUD home and on some repo's, the FHA inspection will be so picky and they won't approve it is probably why you were guided in a different direction.
3. She is telling you that because they are very picky on what house you buy when you get those type of loans. If you're wanting to live outside of city limits, try for a USDA Rural Development loan -- there are usually no down payments or closing costs. It is based on income; however, but you might still check it out. usda.gov search rural development home loan it's a government loan and they will work with you if you face any times of trouble Good luck!