Has anyone used a VA loan to buy a foreclosure?

Question

Hey all!

I'm spending this week learning about foreclosure investing and a question came up that I hope someone could lend some insight.

I'm a Navy Veteran and would like to use my VA loan to make my first home purchase sometime next year. Since a VA inspector would need to verify the condition and value of a home before the money is lent, does this mean there is no way to buy a foreclosure with VA loan financing?

Ben Mardis · Answer

Thanks for the information! I had no been made aware of that yet.

Ron S. · Answer

It's interesting how many people don't read the entire post. No, you cannot use your VA eligibility to bid on a home at a foreclosure sale in New York.

Once the sale has occurred, if the property reverts back to the lender (Meaning it didn't' sell to a 3rd party), then yes, you can use your VA eligibility to purchase, if the seller (Bank/servicer/credit union, etc.) accepts your offer, and, if the property meets VA requirements (Section 1, etc.).

I sell the REO my bank takes back and I don't like VA because they try to stick me with fees and try to make me do repairs that we just aren't going to do. It's a great program for a veteran and a good program for a seller to participate in if the property is in good shape but not always the best option for a foreclosed property.

Jamie O'Connell · Answer

Just from my limited looking at auctions I dont believe you get a ton of time between "winning" the bid and when you have to pony up the cash. I believe you have to put cash down within a certain time period (5-10 days) and then no inspection and also full balance pretty quick. I do think you can normally get funding in that time frame and it doesn't have to be actual cash for balance but I do think the deposit has to be cash, debit, certified check etc.

VA I think most want the benefit of zero cash down so thats a bit of a draw back and the inspection is rare so approved for VA wont go through with funding due to lack of inspection.

Again I have never bought a house at auction nor am I in the Military so this is just from my research but not tested.

Ben Mardis · Answer

But what about buying at auction? From what I understand you don’t get to do a thorough inspection of the house before auction. Would a VA loan only work if you put in an offer before foreclosure or after the bank buys it?

Ben Mardis · Answer

But what about buying at auction? From what I understand you don’t get to do a thorough inspection of the house before auction. Would a VA loan only work if you put in an offer before foreclosure or after the bank buys it?