HUD Homes
HUD homes are homes that has been acquired by the U.S.
Department of Housing and Urban Development. The
properties are usually single family residences or condos and
can be in different states of disrepair.
In general, HUD homes attract a wide range
of potential home buyers. Investors flock to HUD homes
in order to find a distressed property that can be fixed up and resold at
a higher price. Teachers and police offers have the
opportunity to purchase HUD homes at 50% off of the sales
price. Other home buyers are drawn to HUD homes because
they are looking for a home that is below market value and
realize that they can buy a larger home than they would
normally qualify to purchase.
If you are a
First Time Buyer it is
advisable that you work with somebody who has dealt with
purchasing HUD homes in the past. Most notably if you are
working with a Realtor make sure they have been through the
process. HUD homes are generally sold "as is", meaning they do
not warrant the condition and very rarely fix anything.
Also, HUD requires that all bidders must be
pre-approved to purchase the HUD home. In other words, if
you are looking to finance the property, you must make
application and have a conditional loan commitment from a
qualified lender, unless you plan on paying cash for the
property.
If you are paying "all cash" for the
property you will need to provide HUD sufficient evidence to
show that the he or she has enough cash to purchase the home.
Sufficient evidence that HUD may ask for includes a bank
statement, deposit slip, or a letter signed by a banker.
Why Does HUD have homes to sell?
The United States Department of Housing and
Urban Development (HUD), is the federal agency that oversees
the resale of "HUD homes". HUD homes refer to HUD foreclosure
property that was conveyed to HUD when a homeowner failed
to make payments on their FHA insured mortgage. Many times the
people that were foreclosed make significant damage to the
homes before they vacate the property. Others leave the homes
in pristine condition.
HUD has classified purchasers into two
categories:
1) Owner-occupied buyers: An
owner-occupied buyer is a person that will occupy the
property as his or her primary residence within 30 days of
the close of escrow
2) Investors. . An investor is
essentially everybody else—people looking to buy real
estate as an investment, someone looking for a second home
Where to find
HUD Homes:
Most homes for
sale by HUD can be found through your local Real Estate Agent.
Once a property is available for sale it is listed in the
local Multiple Listing Service (MLS). There are also many
internet sites that for a fee will provide a list of
foreclosed homes for sale. Some are HUD homes, or they may be
homes available through other agencies such as VA, FHLMC
(Freddie Mac), FNMA (Fannie Mae), or regular bank owned REO.
Once site you
might look at is
Foreclosure.com.
Foreclosure.com collects
data from multiple sources and provides it in an easy to read
format.
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