Below is a cut/paste from a site I found.

Thus, an investor can purchase a foreclosed home and make improvements to it only to see it seized by the IRS as payment for the previous owner’s outstanding tax debt.

They will put up the 20 percent down payment and take the title of the home.

Let's look at your situation LOGICALLY:)OPTION #1With your combined $100k for a down payment, you could buy a $1M+ SFR home in California. 

First, hopefully you communicated with your Landlord in the beginning about the short payments and didn't just not pay as usual.

Hello, before I give my story, my wife and I are looking for a 1-2 bedroom apartment we have a monthly budget of 1750, we both have poor credit, my wife Ariana, Graduated from Brown University last year, she will be 48 in May this year and is currently an Operations Manager II at kent hospital through Sodexo, she makes 75k a year, and approximately 4500 after taxes a month, she has no criminal history, as to our poor credit, we had to choose between paying our rent and electricity during covid, or pay our credit cards, we have never missed a rent payment, and have lived in the same residence for the last 4 years with no issues, we are looking for an apartment because our landlord wants to renovate his building. with that said...I am writing to proactively disclose information that may appear on a background check.In 2009, I was involved in an incident that resulted in a felony charge.

We have a lender saying we cant use cash as a down payment for a house, and that we would have to distribute the money to family/friends bank accounts then get them to wire the funds to the the lender.

Having professional remediation is unbelievably expensive to pay rent on all of the equipment, monitor moisture content multiple times daily, and ultimately cut out some of the sheetrock to replace it.

You will literally never get a good product from guys like this.Second -  Never, never. never let the Contractor get ahead of you in the progress payments.

Paying extra on the mortgage will not lower your payment.