Can a VA Loan be used for a Sheriff's Sale property?

There has been a lot of input stating that is is next to impossible to use a VA loan on a foreclosed properties. I am looking at bidding on a cabin at a great price and I have two main concerns.

First, the home may not qualify "as is" for a standard VA Loan for "Existing Construction" but couldn't it qualify under the VA Loan's "Proposed or Under Construction" category as an eligible property? That way any required repairs would be identified and the cost rolled into the loan?

The second concern is that the home is not hooked into standard electric utilities. It currently has a generator and a battery bank and I would install a residential windmill. The property has been surveyed as being in a commercial grade wind zone.

I know the property well and the opeing bid is half of the construction cost not to mention the 20 acres. Thank you for your input.
The plan would be that as "Proposed Construction" the cost of the windmill or other VA required power would be included in the loan. The 10% down at auction is not a problem. With a VA loan I would recover the 10% upon full payment. I would prefer to finance the entire amount and put the 10% into other new home costs.

Comments

5 Responses to “Can a VA Loan be used for a Sheriff's Sale property?”
  1. ranger_co_1_75 says:
    May 21, 2010 at 7:18 pm

    In my area, Lots of homes outside the conventional power grid have been purchased using VA guaranteed loans. So I would say there is a way to purchase using renewable energy sources you list.

    As for purchasing foreclosed homes, the only problem I can fore see is if the home is going up for auction and the amount of money needed is unknown or some other unforeseeable factor. If the home has already been through the auction and the deed is clear of clouds, it should be as simple as any other VA loan.

    VA loans work like this. The VA guarantees the bank they will be paid back if they loan money to you. The only time the VA actually puts up the money for a loan is in a circumstance where the Veteran can’t get a conventional loan from a bank.

  2. Realtoratheart says:
    May 21, 2010 at 7:18 pm

    Your second concern, will dash any hope of using VA.

  3. godged says:
    May 21, 2010 at 7:18 pm

    You will NEVER get a VA loan without standard utilities. If the windmill was already in, that may be OK, but a generator is not. And although the rules vary by area, most Sheriff’s Sale auctions require a cashier’s check within a short time after the auction, not nearly enough time to process a government loan.

  4. Janet P says:
    May 21, 2010 at 7:18 pm

    No, they won’t even let you bid. When you purchase you not only purchase as is, but without any contingencies at all, there are no inspections, no on ability to obtain a loan, no appraisals, nothing.

    You bid you pay, period.

    VA will not loan without an inspection and also requires seller participation.

    As you will not be able to provide proof of funding you will not be bidding.

  5. Doctor Deth says:
    May 21, 2010 at 7:18 pm

    why would you buy any house at auction with cash or any other kind of financing unless you are allowed to get a full house inspection doen – which you probably are not allowed to do

    what happens if it needs $50,000 worth of work to pass an occupancy inspection – meaning – you wouldn;t even be allowed to move in until all that work is done? – then you’d really be up a creek