What Are HUD Homes and How Do You Buy One?
Real estate has always been a hot commodity. In the past few years, though, the price of homes has gone up while the pool of available houses has gone down.
What if there was an option to buy a great home for you and your family that won’t break your budget?
That’s where HUD homes come in.
What Are HUD Homes?
The United States has the Department of Housing and Urban Development (HUD). The Federal Housing Administration (FHA) is part of it.
A homeowner can get a loan to purchase a home from the FHA. Typically, these loans have a low down payment and are easier to qualify for.
If the purchaser suddenly becomes unable to pay their mortgage, they go into foreclosure. HUD, then, picks up the house.
Why Buy Homes from HUD?
HUD homes come with plenty of pros and cons – but let’s get to the benefits first.
As we mentioned above, HUD gets stuck with foreclosed homes. This is great because they need to get rid of it fast – and pass the savings on to you.
These homes are often priced below market value. Certain markets even qualify for special offers or incentives, too.
One great incentive is the Good Neighbor program. If you’re a teacher, police officer, or other community worker, you could qualify for 50% off of the home list price!
Risks You Should Know
Before you start bidding, know that HUD sells homes as-is. You’ll need to factor in the costs of any repairs before you make a purchase.
If you’re into fixer-uppers, this could be your ideal situation. Looking to move in soon? Get the home inspected before you put in a bid.
While HUD homes might need additional work, that’s not to say they sit neglected waiting for a buyer. HUD assigns a “field service manager” to each home to keep an eye on it while it’s unoccupied.
How to Find a Home
You won’t be able to find HUD homes listed on regular real estate sites. HUD’s website will have a list of homes in your state (or in the nation, if you’re looking to move).
Once you find one you like, you’ll need to hire a HUD-approved real estate broker to get a look at the house.
You can find an approved broker through HUD’s website as well. Sometimes your preferred broker will be approved; ask them to find out.
Making a Purchase
HUD sells homes through a bidding process. You have to hire a licensed real estate agent to help with the bid.
If your bid is accepted, things will move quickly. There’s usually a 30 to 60-day turnaround from your contract being accepted.
HUD doesn’t finance homes, so learn more about what home loans you qualify for when you make your bid.
You’re This Much Closer to Being a Homeowner!
Armed with these tips, you’re sure to score a great deal on a home from HUD! You’ll be moving into your new place in no time.
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