February 23rd, 2016 5:42 PM by NE TEXAS REALTY GROUP
Buying HUD Homes
HUD Home Store is the
listing site for HUD real estate owned (REO) single-family properties.
This site provides the public, brokers, potential owner-occupants, state
and local governments and nonprofit organizations a centralized location to
search the inventory of HUD properties for sale. In addition, registered real
estate brokers and other organizations can place bids on behalf of their
clients to purchase a HUD property. HUD Home Store also
includes many informative user-friendly features providing advice and guidance
for consumers on the home buying process. Frequently Asked Questions (FAQs) are
available online for:
Real Estate Agents
Members of the Mortgage Industry
Nonprofit Organizations and
What is a HUD Home?
A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of
a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner
and offers it for sale to recover the loss on the foreclosure claim.
The following information is provided as an introduction to the
process through which HUD homes can be purchased. You can either scroll down
the page, or access specific topics through the following topic menu.
Additional links provided in the menu to the right provide access to FHA
program and policy information for homeowners, homebuyers, and members of the
mortgage lending and real estate industry.
Buying a HUD Home
FHA Special Discount Sales Programs
Available HUD Properties
Buy a HUD Home?
Anyone who has the required cash or can qualify for a loan
(subject to certain restrictions) may buy a HUD Home. HUD Homes are
initially offered to owner-occupant purchasers (people who are buying the home
as their primary residence). Following the priority period for owner occupants,
unsold properties are available to all buyers, including investors.
Should I Get a Home
HUD does not warrant the condition of its properties and will not
pay for the correction of defects or repairs. Since the new owner will be
responsible for making needed repairs, HUD strongly urges every potential
homebuyer to get an inspection from a licensed professional home inspector prior to
submitting an offer to purchase.
If you are interested in acquiring a HUD Home that is in need of
repair, you may be interested in applying for an FHA 203(k) Rehabilitation Loan. When a
homebuyer wants to purchase a house in need of repair or modernization, the
homebuyer usually has to obtain financing first to purchase the dwelling;
additional financing to do the rehabilitation construction; and a permanent
mortgage when the work is completed to pay off the interim loans with a
permanent mortgage. Often the interim financing (the acquisition and
construction loans) involves relatively high interest rates and short
amortization periods. FHA's 203(k) Rehabilitation Loan is
designed to address this situation. The borrower can get just one mortgage
loan, at a long-term fixed (or adjustable) rate, to finance both the
acquisition and the rehabilitation of the property.
HUD does not provide direct financing to buyers of HUD Homes.
Buyers must obtain financing through either their own cash reserves or a
mortgage lender. If you have the necessary available cash or can qualify for a
loan (subject to certain restrictions) you may buy a HUD Home. While HUD does
not provide direct financing for the purchase of a HUD Home, it may be possible
for you to qualify for an FHA-insured mortgage to
finance the purchase.