Department of Housing and Urban Development (HUD) residential foreclosures are available throughout the United States. The process of purchasing a HUD home versus any other property is quite different. Nothnagle REALTORS, and other HUD certified brokers, offer agents who have been properly trained in how to handle these special transactions.
What is a HUD home?
The Federal Housing Administration (FHA) is a part of HUD. If a foreclosed home was purchased with a loan insured by the FHA, the lender can file a claim for the balance due on the mortgage. FHA pays the lender's claim then transfers ownership of the property to HUD, which then sells the home.
How much do HUD homes cost?
HUD homes are appraised and then priced at fair market value for their location. The price of a home in need of repairs is adjusted downwards to reflect the investment the new owner must make to improve the home.
Will HUD make the repairs?
HUD homes are sold as-is. The new owner is responsible for all repairs and improvements.
Do I simply make an offer to purchase a home?
HUD foreclosures are sold using a bidding process. There's an Offer Period, during which sealed bids are accepted from your agent. At the end of that period, all offers are opened. HUD will generally accept the highest bid, or the bid that brings them the highest net.
If the home remains unsold after the initial period, bids are opened as received.
If your bid is accepted, your agent will be notified within a day or two. You will be given a settlement date, usually 30-60 days from the date of your accepted contract.
Will HUD finance the home?
HUD does not finance homes. You'll need to arrange for conventional or other financing. Be sure your financing is in order before you make an offer. If your bid is accepted, and you do not close on the house, you may lose the earnest money deposit you submitted with the offer.
For more information about HUD homes, or to get help finding one, click here.