HUD homes for sale are residential properties that are acquired by HUD due to foreclosure on an FHA loan and then the property belongs to HUD to try to sell and recoup some of the money. With the housing crisis, many people are looking to get good deals and are looking for HUD homes for sale that they can buy below market and earn a profit on at resale.
Who is eligible to buy a HUD home?
HUD foreclosures are available to anybody if they have cash or can qualify for a loan under certain restrictions. HUD homes for sale are first offered to the owner/occupant, and then put on the open market for any buyers or investors. If you are a law enforcement officer, teach, firefighter, EMT or work for the local government, there are reduced prices available on properties in designated areas under the Good Neighbor Initiative.
How can I find HUD foreclosures?
You can find HUD homes for sale on different Internet sites that are handled by management companies or real estate brokers that have signed a contract with HUD. HUD pays the real estate commission and the realtor can submit the offer on your behalf. Keep in mind that all HUD homes for sale are sold “as is”, so you will need to pay for your own inspection, since no home warranty is offered.
Can I finance a HUD home for sale?
Some HUD homes may qualify for FHA financing, although, you are responsible for getting your own financing, just like buying any other house. HUD foreclosures can be a great value, but condition on some homes could make financing more difficult than on others. You will need to find a lender that is willing to loan you the money, based on the HUD foreclosure you select.
How is closing handled on HUD foreclosure transactions?
There are strict guidelines, normally a sale contract must be submitted within 48 hours after winning the successful bid, and closing has to take place within the set deadlines, which are normally 30 or 60 days. Be sure that you have done your research and are prepared to move quickly, as HUD foreclosed homes don¡t have much flexibility on closing and you could lose your earnest deposit that normally ranges from $500 on up.
It is best to start shopping for the loan before you ever make a bid on HUD homes for sale. You will need to find a lender that will pre-approve you and be willing to lend on a HUD foreclosure. Also, you will want to have an insurance agent lined up for insurance coverage.
HUD homes for sale can be great for investors or fixer-uppers
Many investors have learned how to shop and bid on HUD homes for sale. Many of them may need some repair before occupancy or resale. In the majority of cases, the winning bid will reflect the need for repairs, but you will want to have the home inspected to know what problems to anticipate.
HUD foreclosures can be a great investment and a way to get instant equity if you bid right. You just have to do some research and be patient when dealing with HUD, but you can find many HUD homes for sale listed on the Internet.