What Are HUD Homes and How to Find HUD Homes For Sale
HUD is a government agency which is the shortened form of US Department of Housing and Urban Development. There are many homes that are owned by HUD that are up for sale. You may want to find some of these homes which offer low purchase prices. HUD obtains homes through foreclosures which are completed on a home which was purchased through a mortgage insured by FHA. These units may be between 1 to 4 units of residential property for dwelling. Since HUD loses money on the foreclosure they place these specific homes up for sale in order to get back some of the lost funds from the process.
Virtually anyone can buy one of the HUD homes that are up for sale. Priority is given to the people who want to use it as their main residence. If the homes have been up for sale long enough without interest from people who want to live there, investors are given their chance to buy it if they desire to rent it out. Some professionals in varying career paths may also be given priority along with an extra reduction on the sale price. In special areas; teachers, firefighters, local governments, nonprofit organizations, and law enforcement officers are given these deals. The specific name for these is the Good Neighbor Initiatives.
HUD homes can be found mainly on the internet. They are listed online with management companies who have agreed to directly contract with HUD. The real estate agents who are registered with HUD directly have the possibility of contracting the purchase by submitting your offer to HUD. HUD also helps the real estate broker by paying their commission for them. As with any home you buy from anybody you must get an inspection. An inspection lets you know of any problems that the home may face such as major repairs or unseen issues that may be very costly to fix. You may not have the funds to fix these or the desire to fix them either. You may also want to get multiple inspections if the first does not satisfy you. Since this is such a large investment you want to be completely prepared and satisfied before plunging in and sealing the deal. HUD homes are sold as is so once you sign the paperwork it is done and there is no turning back.
Financing may be a concern for you as well. Unfortunately, HUD does not offer any financing directly through them. Some homes that they have available are eligible for the FHA insured loans which you must get separately. They are the federal housing administration and are the biggest government insurer of mortgages in the entire world. You can also do some research while shopping around to find the best lender for your individual situation. Look at many of them to find the best terms for your loan with both points and the lowest interest rate available. HUD is a great place to start when you decide that you’re going to purchase a home.