Buying a HUD Home
Its Time to BUY a HUD Home NOW!!
The Federal Housing Administration (FHA) is a part of HUD–the part that provides federal mortgage insurance. If a foreclosed home was purchased with a loan insured by the FHA, the lender can file a claim for the balance due on the mortgage. FHA pays the lender’s claim, then transfers ownership of the property to HUD, which sells the home.
How much do HUD homes cost?
HUD homes are appraised, then priced at fair market value for their location. The price of a home in need of repairs is adjusted downwards to reflect the investment the new owner must make to improve the home.
Will HUD make the repairs?
HUD homes are sold as-is. The new owner is responsible for all repairs and improvements.
How do I find a HUD home?
You can view HUD listings on HUD’s Web site.
How can i get more information about the process?
You can view HUD website on www.hudmdstore.com
When you’ve located a home you would like to see, our HUD-approved real estate office can show you the property. HUD employees do not work with home buyers–you must use an agent.
Do I simply make an offer to purchase a home?
HUD foreclosures are sold using a bidding process. There’s an Offer Period, during which sealed bids are accepted from your agent. At the end of that period, all offers are opened. HUD will generally accept the highest bid, or the bid that brings them the highest net.
If the home remains unsold after the initial period, bids are opened as received.
If your bid is accepted, your agent will be notified within a day or two. You will be given a settlement date, usually 30-60 days from the date of your accepted contract.
Will HUD finance the home?
HUD does not finance homes. You’ll need to arrange for conventional or FHA financing. Be sure your financing is in order before you make an offer. If your bid is accepted, and you do not close on the house, you may lose the earnest money deposit you submitted with the offer.
Should I have a professional home inspection?
Home inspections are recommended for any home purchase. You should inspect a HUD foreclosure before you make the offer to purchase. It will help you determine a bidding price, especially if repairs are required.
Homes built prior to 1978 may contain lead paint, so learn more lead paint hazards before making an offer. Other items to consider are asbestos content, buried storage tanks, radon, and other environmental hazards.
Can I buy a HUD foreclosure for investment purposes?
During the initial offering, HUD homes are usually available only to those who wish to live in the home. If an owner-occupant does not bid on the home, investors are allowed to enter the bidding process.
Does HUD offer other programs?
If foreclosures are not sold within six months, HUD will sell them for $1 each to approved nonprofit organizations and government agencies. Homes must then be used create housing for families in need or to benefit neighborhoods.
HUD offers special home purchase programs for teachers and full time law enforcement officers. This program is called Good Neighbor Next Door Program.