Question 1: What is a "HUD Home"?
Answer:
When someone with a HUD insured mortgage can't meet the payments,
the lender forecloses on the home; HUD pays the lender what is owed;
and HUD takes ownership of the home. Then we sell it at market value
as quickly as possible.
Question 2: Who can buy a HUD
home?
Answer:
Almost anyone! If you have the cash or can qualify for a mortgage,
subject to certain restrictions, you may buy a HUD home. HUD employees
and relatives of HUD employees are eligible, but must receive written
approval from the Director of HUD's Office of Single Family Asset
Management in order to purchase a HUD-owned single family property.
HUD employees should refer to paragraph 10-29C of Handbook 4310.5,
REV-2, Property Disposition Handbook-One to Four Family Properties
for the exact requirements to purchase a HUD-owned single family
property. Other less common restrictions may apply.
Question 3: Are HUD Homes meant for
people with low incomes?
Answer: HUD
homes range in price, but most are affordable for low- and moderate-income
Americans.
Question 4: Is it true I can get a HUD Home
for a dollar?
Answer: No.
HUD sells homes at market value - that means that the price is set
based on the price of similar homes sold in the area.
Question 5: If the HUD Home needs
repairs, will HUD make them?
Answer: HUD
Homes are sold "as-is," without warranty. That means that HUD will
not pay to correct any problems. But even if a HUD Home needs fixing
up - and not all of them do - it can be a real bargain! For example,
HUD's asking price on the home will reflect the fact that the buyer
will have to invest money to make improvements. HUD might offer
special incentives such as an allowance to upgrade the property,
a moving expense allowance, or a bonus for closing the sale early.
And keep in mind that on most sales, the buyer can request HUD to
pay all or a portion of the financing and closing costs. Your real
estate agent will have details. We encourage you to get the
home professionally inspected before you make an offer so you will
know what repairs you may have to make BEFORE you submit your bid.
Question 6: How do I buy a HUD
home?
Answer: Start
by finding a participating real estate agent. Your real estate agent
must submit your bid for you. Normally, HUD Homes are sold
in an "Offer Period." At the end of the Offer Period, all offers
are opened and, basically, the highest reasonable bid is accepted.
If the home isn't sold in the initial Offer Period, you can submit
a bid until the home is sold. Bids can be submitted any day of the
week, including weekends and holidays. They will be opened the next
business day. If your bid is acceptable to HUD, your real estate
agent will be notified, usually within 48 hours.
Question 7: If my bid is accepted, what happens next?
Answer: Your
real estate agent will help you through the paperwork process. You'll
be given a settlement date, normally within 30-60 days, by which
you need to arrange financing and close the sale, or forfeit your
earnest money deposit, or pay for an extension of your sales contract.
We have an excellent booklet to help you understand the settlement
process: "Buying Your
Home - Settlement Costs and Helpful Information.
When you buy a HUD Home, the selling agent's commission will be
paid by HUD but only if you make this a condition of your offer.
The listing agent's commission is always paid by HUD. HUD will pay
a total sales commission of up to 6%.
Question 8: How can I find out what HUD Homes are for sale?
Answer: Right
here! We update our lists of HUD
Homes for sale every day. If you see one that interests you,
contact one of the real estate agents in your area who shows HUD
homes. They can help you from there.
Question 9: How can I get a loan
to buy a HUD Home?
Answer: HUD
doesn't make loans directly. But we do have a number of mortgage
insurance programs that could help you buy a home. You can read
about those programs. Then
contact a HUD approved lender,
who will take you through the steps and actually make the loan.
Question 10: Can I buy a HUD
Home as an investment?
Answer: Most
HUD Homes are initially offered on a priority basis to owner occupant
purchasers (people who are buying the home as their primary residence).
Following the priority period, unsold properties are then available
to all buyers, including investors.
Question 11: Is there anything
else I should know about HUD Homes?
Answer: We
encourage every homebuyer and homeowner to be a wise consumer, so
be sure to read our consumer information.
Houses built before 1978 may have lead-based
paint, which can cause harm to your family; so be sure to read
about this hazard and about what you would need to do to correct
it. Teachers and law
enforcement officers qualify for 50% discounts in certain situations.
Attention: Nonprofits and Government
Agencies!
HUD has a special
sales program under which approved nonprofit organizations and
government agencies may purchase properties at discounted prices
for use in local housing or homeless programs.
Source: http://hud.gov
