How do you purchase a home that is owned by HUD?
HUD acquires many homes as a result of people taking FHA approved mortgage loans and then defaulting on their mortgage loans and then HUD takes the home, pays the existing mortgage loan off, and resells the homes. Many people are interested in purchasing HUD owned homes because of the possible discounts available off the market value of the home. HUD does list the homes for a reasonable value, but some great deals are available depending on the home and the price negotiated between the buyer and the HUD agency in control of the sale of the home.
In order to purchase a HUD owned home there are some important facts you should know that include:
- HUD owns and sells houses that are single family homes and up to four unit properties that can be used as income rentals, usually as long as the owner resides at the property.
- Anyone can purchase a HUD owned home as long as you can qualify for a mortgage loan to buy the property. HUD owned for sale homes are first offered to people who are planning to purchase the home as their residence and then after a certain period of time lapses with no one interested in purchasing the home, HUD offers the homes for sale to investors who are planning to use the home for income and can purchase the homes even without the intent to personally occupy the residences.
- HUD homes are sold through listing agencies that can be accessed through the HUD website . There you can find a list of all the states that HUD has homes available for sale in. In order to find a list of homes you should click on the state you are interested in purchasing a home in and then follow the instructions on that particular site. The listing agent websites for each state are different so be sure to follow the instructions for finding a list of HUD owned homes in the particular area you are looking to buy in.
- To purchase a HUD owned home you must work with a HUD registered real estate broker that can put in a bid on a home for you and if your bid is accepted and you purchase the home then HUD pays the real estate broker's commission.
- HUD owned homes are sold AS IS with no warranty of any type. It is your responsibility to get the home inspected in order to identify any potential or existing problems with the home or surrounding property. If there are problems with the home and you are still interested in purchasing the property, make sure you include a copy of the home inspection with you bid that should be changed according to the necessary repairs that need to be done to the home. This way HUD can see that there are costly repairs that need to be done to the home and will take this into consideration when deciding whether to accept or reject your offer.
- You can get an FHA mortgage loan to purchase a HUD home. HUD and the FHA work together to guarantee mortgage loans for people in order to have easier accessibility for becoming homeowners. Although HUD owns these homes as a result of FHA loan foreclosures, you can still qualify for an FHA loan to purchase a HUD home as long as you have never defaulted on an FHA loan .
HUD homes for sale can be a great way to purchase your own home or find opportunities for real estate investment properties that can increase your income and overall wealth over time.