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The Short Answer About A VA Loan Foreclosure Purchase. Yes, it is possible to use a VA home loan to purchase a foreclosed home. However, the property must meet the VA's minimum property requirements to qualify for a loan.
VA loans feature their own unique appraisal contingency known as the VA Amendment to Contract. Both buyer and seller must sign this key document. The Amendment to Contract contingency protects a VA buyer's earnest money if they walk away from a deal because the appraised value came in below the purchase price.
Be sure the sales contract includes the \u201cVA escape clause\u201d or \u201cVA option clause.\u201d This provides an option to void the contract if the property doesn't appraise for the contract price.
VA loans work a bit differently than conventional mortgages. The Department of Veterans Affairs (VA) does not make or originate loans, but backs a portion of each loan against default. This backing, or guarantee, is what gives private lenders the confidence to extend $0 down financing and advantageous rates and terms.
In order to qualify for a VA loan, a modular home must be attached to a permanent foundation. The home must also have been built according to HUD guidelines or receive certification from the state in which it was constructed.

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0:42 1:28 How to Complete a FHA/VA Amendatory Clause Form - YouTube YouTube Start of suggested clip End of suggested clip Address the buyer's name the seller's name you'll click that it's incorporated into the purchaseMoreAddress the buyer's name the seller's name you'll click that it's incorporated into the purchase agreement. You'll check the purchase agreement box data form.
These foreclosed properties are colloquially referred to as VA REO homes, or Veterans Affairs real estate owned homes. In effect, in the event of a default on the mortgage loan by a property owner, these homes are repossessed by the Department of Veterans Affairs (VA) if they aren't sold at an auction or a short sale.
Verification and documentation of any recent large deposit(s), a deposit that exceeds 2% of the property's sales price on a purchase transaction and 2% of the fair market value on a refinance transaction, is required.
If you decide to offer earnest money, the VA requires that the money come directly from you. In other words, the deposit cannot be a gift or loan. Therefore, the VA will verify the source of the funds, like they do when you provide your down payment amount.
Asking for seller concessions The VA loan program allows the seller to pay up to 4 percent of the home's price in closing costs. The seller isn't required to pay that much. If you'd like the seller to help cover your closing costs, be sure to let your real estate agent know before you negotiate a purchase contract.

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