Seek help from a HUD registered broker.

Buying a HUD home from the U.S. Department of Housing and Urban Development is a consideration that should not be overlooked.  What is a HUD home?  The Federal Housing Administration (FHA) provides mortgage insurance on certain loans from FHA approved lenders to persons purchasing a home.  These loans are not limited to single family but can include condominiums, townhomes, manufactured homes and other types of property.  If the borrowers of these loans default on payment and the owner falls into foreclosure it can be deeded to HUD who in turn works to quickly sell the home at market value to gain financial return on its mortgage insurance funds.

Buying a HUD home is a smart move for many buyers, and can be a good experience if you know your rights and take the appropriate steps.  As with any home purchase you should make sure that your finances are in order, any blemishes on your credit are addressed and you have qualified for a home loan.  While certain restrictions have tightened for home buyers looking for a loan, do not be shy in searching for and comparing your options.  There are many home buying programs available at state and city levels with some very generous programs for first-time buyers.  HUD itself has local homeownership programs to assist buyers.  One of the more well-known is the Good Neighbor Next Door program for police officers, teachers, fire fighters and EMS employees to purchase property in revitalization areas for a 50% discount with a requirement to occupy the property as your sole residence for a minimum of 36 months.

While many aspects of buying a HUD home are the same as buying traditionally listed homes there are some actions to be aware of.  Specifically owner occupant buyers, if you are considering buying a HUD home it is recommended that you find a real estate broker that is registered with HUD.  They will not only help you search for a home, but help you navigate purchase requirements.  Many buyers start their search online before engaging a real estate professional and it will be important for you to understand that HUD homes are listed and sold in period phases.  HUD homes in a Lottery period are available to only non-profit and government agencies bidders.  HUD homes in an Exclusive period are available to owner occupants, as well as non-profit and government agency bidders for a period of time, and if not sold enter an Extended period phase where the home is open to all bidders, including real estate investors.   Your HUD registered real estate broker will assist you with submitting a bid (an offer to purchase) which must be completed online.

Your broker will also help you in scheduling a home inspection prior to placing a bid.  All HUD homes are sold ‘as-is’ with no warranty.  There are no repairs or responsibilities covered by HUD, which has been considered when setting the list price.  If the property does need repairs, you might consider FHA’s 203(k) progra m that permits buyers to finance up to $35,000 into their mortgage to repair, improve or upgrade their home.  When viewing homes online you will see that most HUD homes include property condition reports that are helpful in understanding the condition of the property.  These reports should not be considered absolute, or a substitute for a property inspection.  You may also find additional information and addendum pertinent to the property.  A positive side to buying a HUD home is that it can be more transparent then traditionally listed homes as there are guidelines and restrictions in place.

For more interesting information and household tips, stay tuned to this blog. For more information about buying a HUD home or selling your home, or to see current HUD homes in your area, visit https://www.bidselect.com. Don’t forget to join our online community by connecting with us on Facebook and Twitter .