A Housing and Urban Development (HUD) home is a residential property that contains one to four groups of residences that have been obtained by HUD.
This happens as a result of foreclosure on a Federal Housing Administration (FHA)-insured mortgage. HUD becomes the owner of the residential property and puts it up for sale in an effort to recover the loss that is a result of the foreclosure.
Almost anyone can purchase a HUD home if he has enough cash or if he can secure a loan. HUD Homes are offered first to those who intend on occupying the home as their primary place of residence. After these potential buyers, HUD then offers properties that have not sold to all buyers. These buyers include those who are buying for investment purposes. Those who have lost their homes due to a disaster, may be eligible for HUD homes at a discounted rate.
HUD properties are as-is– they come with no warranties. If there are any needed repairs, the buyer will be responsible. Since the buyer will be responsible for correcting any problem with the home, HUD strongly suggest that the potential owner pays for a licensed professional to inspect the home before buying it.
If purchasing a HUD residence that needs repair work, applying for an FHA 203(k) Rehabilitation Loan would be the best way for you to go. If you want to buy a home that needs repairs and updates, you must first get the financing to buy the residence. Next you would need additional financing to do the repairs and/or updates; a permanent mortgage once the job is done in order to pay off those interim loans. In order to obtain interim loans, at an affordable rate in order to pay for repairs, look into HUD’s Section 203(k) that addresses this issue.
HUD does not provide financing to potential homeowners. As a buyer, you must secure your own financing through your savings or money from a mortgage lending institution. While HUD will not provide financing through their department for buying one of their homes, it would be possible for to qualify for an FHA-insured mortgage in order to buy your home.
HUD Home Store is the the site that list for HUD real estate owned (REO) single-family residences. At this site the public, state and local governments, brokers, and organizations that are not for profit are provided with one place to search HUD properties that are for sale. Also, real estate brokers who are registered and other organizations that have been approved are able to bid in the place of clients for the purpose of buying a HUD property.