What Is A HUD Home?
A HUD home is a residential property acquired by the Department of Housing and Urban Development (HUD). When an FHA insured mortgage is foreclosed upon, HUD often becomes the property owner and offers it for sale to recover the loss on the foreclosure claim. HUD homes are all 1 to 4 unit properties.
Who Can Buy a HUD Home?
Almost everyone. They can be purchased with cash, or you can get a mortgage like any other home. HUD offers properties for owner occupant purchases first, the length of time depends on the property and whether it is insurable through FHA. If after that time the property is still unsold, it becomes available to anyone, including investors.
Why Buy a HUD Home?
Why not is a better question! The government (HUD) does not want to own residential real estate. So they price properties competitively and negotiate aggressively. They are located all over the metro and can be some of the best deal around!
How Are HUD Homes Sold?
The initial process is much like a silent auction. Everyone submits their bids(offers) on a property, they go directly to HUD (So the listing brokers don't know what bids have been put in) at the end of the bidding HUD looks at all of the bids at once and chooses the bid which has the highest net price to HUD.
How Long Long Does a HUD Home Take to Close?
HUD homes have a process that is very different than a traditional sale. This doesn't make much of a difference to a buyer as long as they work with an agent that is familiar with HUD homes. If your agent doesn't understand the process it can slow the closing down weeks and weeks. On our office's sales typically take around 60 days to close. Homes like town homes that have associations (HOA's) usually take a little longer.
Will HUD Pay for My Closing Costs?
Yes, up to 3% of the purchase price if you ask for it. HUD will take this into account when choosing an offer. Meaning if you put a bid in at $100,000 with 3% to closing costs you would lose to a bidder that bid $98,000 without closing costs.
Where can I Find a HUD Registered Agent?
I am Interested in Purchasing a HUD Home What Do I Do?
First thing is to get pre-approved by a lender. MSP Agents can help with this as well; we have relationships with some of the best in the business. So if you need help contact us. Work with the experts!
-Brooks Johnson 612-998-0704