Can First Time Buyers Purchase a Distressed Property?

Home buyers

In especially hot real estate markets like Denver, many buyers are shifting their attention to non-traditional home sales, including short sales, foreclosure properties and REO (bank owned) properties. You may be wondering if first-time buyers are well-suited to purchase these types of homes, and while you may encounter a little competition, distressed properties are a viable option for many first time buyers.

First-time buyers include those who have either never owned a home or have not held title to real property for at least the past three years. Financing that caters to most first-time buyers includes low- or no-down-payment, government-insured loans offered by the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA). Usually these types of financing can all be used for distressed properties.

If you’re looking specifically at purchasing a foreclosure, there’s another option created specifically for those types of properties. The 203(k) loan only applies to foreclosed homes in need of major repairs, and it can be vital to buyers, given one of the most common mistakes is to underestimate repair costs.

While you may have heard conflicting information on buying distressed properties, there really isn’t much difference between getting a home loan for a distressed property and a traditional property. Ultimately, lenders still issue home loans based on the borrower’s creditworthiness and the property’s estimated value.

Ready to start checking out REOs, foreclosures or short sales in the Denver area? Contact the experienced professionals at Metrowest – we’d love to help.

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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