HUD Homes are homes owned by the U.S. Government.? ?HUD?stand for the U.S. Department of Housing & Urban Development.
How Do Homes Become Owned By HUD?
When a person buys a home using an FHA loan (Federal Housing Administration), FHA guarantees the loan against default for the lender (e.g. BofA, Wells Fargo, Etc.).? If the homeowner defaults on the FHA backed loan and goes through foreclosure, FHA pays off the lender and HUD is given title to the property.
Who Can Buy HUD Homes?
Both owner-occupants and investors can purchase HUD Homes (as well as governmental agencies & non-profits).? Typically, HUD will review owner-occupant offers after a period of 10 days on the open market.? Investors offers are typically not considered for the first 30 days.
How Can I Find Out About HUD Homes For Sale?
We maintain a list of current HUD homes in the Boise-Metro area for you here.
Can I Make An Offer Contingent On An Inspection?
HUD encourages inspections prior to the submittable of an offer.? However, offers can also be subject to an inspection.? Typically, and this is true with many REO type of properties, you would need to find ?material defects? previously unknown to be able terminate the agreement.? Note: HUD can have more stringent requirements for investors.
How Long Does it Take to Close?
You can typically close on a HUD home in 30-45 days.
How Do I Submit An Offer?
You must have a HUD registered real estate broker to submit an offer on a HUD home.? We can help you with that, please contact us.
What Are The Advantages of Purchasing HUD Homes?
One the primary advantages for purchasing HUD homes are for FHA buyers.? Many properties that have been through foreclosure will not qualify for FHA financing due the need for repairs.? However, HUD has an FHA appraisal done on the property to identify any required repairs and put that repair cost in an escrow account to be completed after closing (Note: the amount is rolled in the new FHA loan).? This is a scenario that is not typically possible on other REO type of properties.
Another benefit of bidding on HUD homes is the responsiveness the offer.? Typically, you?ll get an answer on your offer within 24-48 hours.
What Are The Disadvantages Of Purchasing HUD Homes?
Like many governmental entities, the closing process is a bit cumbersome and bureaucratic.? Buyer?s need to have a lot of patience and need a broker who knows HUD procedures to successfully keep the transaction on track for closing.
Disclaimer: Information deemed reliable but not guaranteed.
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Source: http://www.boiserealestateplus.com/what-are-hud-homes
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