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         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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