Selling Homes... The HUD Way.
How It Works... How HUD Sells Homes.
HUD is the federal housing agency that insures FHA loans. When someone with a HUD-insured mortgage can't meet the payments, the lender forecloses on the home and HUD takes ownership of it. HUD says that it tries to sell foreclosures at market value as quickly as possible. HUD homes vary in price and location but most are affordable for people with low to moderate incomes.
Start by talking to an experienced real estate agent. Your agent must submit your bid for you. Click here to find out how much house you can afford.
The Envelope, Please Your Offer.
Normally, HUD homes are sold in an "Offer Period," at the end of which all offers are opened and, basically, the highest bid is accepted. HUD usually pays the selling agent's commissions, up to 6% maximum. Most HUD homes are initially offered on a priority basis to owner-occupant purchasers (people who are buying the home as their primary residence).
Funding... Does HUD Do Financing?
If you qualify for a FHA loan, you'll get good loan terms. You might also qualify for HUD to pay all or part of the financing fees and closing costs. That really sweetens the deal. In addition, HUD offers special buying incentives, such as allowances for upgrading the property, moving expenses, and bonuses for closing the sale early.
Is Your HUD Home... A DUD?
Although these homes sometimes need repairs, HUD sells them "as-is," without warranty. Don't expect HUD to repair any problems as a condition of the sale, either. But that's not necessarily a bad thing. HUD's asking price will probably be adjusted to reflect the cost of necessary improvements or repairs.
Again, make sure you get a professional, independent home inspection prior to purchase!
That's the Lowdown on Low Prices from HUD
Let's veer off into VA homes...
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