State-owned property auction process? (Not a foreclosure!)

[Kate Offen]

Hey hey, I'm a not only a newbie to the BP Forum, but also to real estate. I have yet to buy a property because I feel like I need to research everything to death before even trying...so I have a question where time is of the essence because it is actually an auction that is coming up in two weeks. (And so far no agents or lenders I've spoken with could give me a solid answer...)

Basically, I'm looking at a property that is currently owned by the state of New York. It used to be a home for the physically handicapped that recently closed. There are no taxes owed (since its owned by the state). There is an open house this Friday and my brother (an experienced flipper) and I will be attending so he can give me a better idea of how large of a project it might be. (So if it doesn't pan out--yay learning!) The property appears to be in good condition. My husband and I are trying to decide if we should use this as our primary residence. (We currently live 10 minutes from the propery and are renting at an extremely low amount from my mother who owns the house we're in...I'd also like to by this house in the future.) Or if we should make some updates and sell it. Of course this would depend on what we could get it for.

This auction requires 3% down to bid, and then requiresan additional 7% (so total 10% of final purchase amount) within 10 days of the auction. The winning bidder then as 90 days to pay the rest of the amount in full. My question is, since this is not a foreclosure auction, do you think it would be possible to take out a mortage for the remaining  amount? I spoke to two agents and two different lenders who actually had NO IDEA if this was possible. Typically on a foreclosure auction its cash-only, obvs, but since this was not a foreclosure and a state-owned property that has no leins, they couldn't give me an answer.

Does anyone have any experience with this type of thing? Thanks!