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How to Buy a HUD HOME

Department of Housing and Urban Development (HUD) residential foreclosures are available throughout the United States. The sales process for purchasing a HUD home isn't quite the same as you'll encounter when buying a home from an individual, so take a few notes before you go home shopping.

What is a HUD home?
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. FHA 203b or 203k loans are very popular loans with HUD homes. They both allow repairs to be rolled into your loan. Also, downpayment for HUD homes can be as low as $100 dollars. Contact us today for more information on this process.

How do I find a HUD home?
You can view HUD listings by following state links on HUD's Web site. Each state's Internet destination is set up a little differently, so take some time to browse the search engines and layout.

Once you've located a home you would like to see, since we are a HUD-approved real estate office, The Webb Real Estate Team can show you any HUD property. They are listed on the Web site. HUD employees do not work with home buyers--you must use an agent. We can also provide you with an up to date list of all HUD homes available in your area.

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 other 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 build 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, 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 may then 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.

If you would like more information on HUD HOMES or on the entire process please contact us today at webb_realestate@yahoo.com or 678-445-7369.  This is a great opportunity for home ownership at a minimal cost! 

 


Published Saturday, January 18, 2014 8:30 AM by ROGER WEBB & THE WEBB REAL ESTATE TEAM

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