Financing homes during redemption

[Bill Bodziak]

Hello all...I am hoping someone has some experience here and can give some advise. Here is the situation....

I am an agent and investor in Michigan helping a friend/client find a first home. The perfect home came on the market, we saw it and made a good offer. Waiting on a response.

According to records and the listing agent the sellers have appox 50% equity in the home and are in the middle of the divorce. There was a QCD to the wife who now owns it solely. During the divorce the sellers quit paying the note, they are now in the redemption period with about 60 days left. If they cannot cover the balance of the note or find a buyer they lose the house... 

The buyer is ready to go with an FHA loan. I spoke with the lender rep and he does not know if the buyer can use financing for the home since it needs to be purchased in cash if done during the redemption period. My response to this is that is what the closing is for... The only info I have been able to find is in regards to problems with financing is using conventional loans that will be sold to FNMA or FDMC .

Can a buyer use an FHA loan to purchase a home during the redemption period?