HUD Home Facts
What is a HUD Home?
- A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.
What is HUD?
-The U.S. Department of Housing and Urban Development.
Who can buy HUD Homes?
- Anyone who has the required cash or can qualify for a loan (subject to certain restrictions) may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors. Its important to know you need a realtor to bid on the home for you.
Are HUD Home's fixed up or sold As-Is?
- Generally HUD does not warrant the condition of its properties and will not pay for the correction of defects or repairs. The Homes are sold in As-Is condition. Since the new owner will be responsible for making needed repairs, HUD strongly urges every potential homebuyer to get an inspection from a licensed professional home inspectorprop prior to submitting an offer to purchase.
What if I'm interested in buying a HUD home that needs repairs?
-If you are interested in acquiring a HUD Home that is in need of repair, you may be interested in applying for anFHA (203K)ff FHA 203(K) rehabilitation loan, When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. FHA's 203 (K) rehabilitation loan is designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property.
Financing a HUD home:
-HUD does not provide direct financing to buyers of HUD Homes. Buyers must obtain financing through either their own cash reserves or a mortgage lender. If you have the necessary available cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. While HUD does not provide direct financing for the purchase of a HUD Home, it may be possible for you to qualify for an FHA insured-mortgage to finance the purchase.
If you are interested in HUD home properties please don't hesitate to call me! I have experience in HUD home sales and would love to help you purchase your next home! Call me today!