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Answers to Some of the Most Common Questions About HUD Homes

September 1, 2010 by · Leave a Comment 

By Seomul Evans

With the financial crisis still looming large over the country’s economy; this sure is a good time to purchase real estate. As a matter of fact, you can get some of the cheapest deals ever seen on HUD homes. If you are interested in buying a HUD code home and have questions about the buying process and the homes in general; then here are some answers for you:

What is the definition of a HUD Code home?

When people who cannot pay their FHA insured mortgage, the lender forecloses the home and HUD in turn purchases the homes from the lender becoming the owner of the property. Then the Department of Housing and Development (HUD) offers the property for sale to recover their losses. HUD tries to sell the house at market value and since time is of essence to them so these homes are auctioned off.

Who can purchase a HUD home?

Almost anybody can bid on a HUD home. If you have enough liquidity or if you are pre-qualified for a mortgage, you can bid on a HUD if you have a pre-approved mortgage or if you have enough funds to purchase the home. There are; however, certain restrictions that the purchase is subjected to and if you qualify, you can certainly buy a HUD home. Even HUD employees and their relatives are eligible to buy a home but they will need to get a written approval from the HUD Director.

Are HUD homes only appropriate for people in the lower income group?

HUD homes are certainly the cheapest housing options in the market today; they are suitable for people from the lower and the middle income groups.

Can I really get a HUD home for a dollar?

No, the purchase price of a HUD home is at par with the current market value of the property; this means that the price of a HUD home is based on the price of other similar homes in the area

Is HUD responsible for any repair work that need to be undertaken to upgrade the home to HUD compliance?

HUD is not responsible and nor will the department incur the cost of any repair work that needs to be undertaken to upgrade the house to be compliant with HUD code. These homes are sold “as-is” which means that there is no warranty on them. The asking price of a home is based on the condition of the home and will often be indicative of the fact the new owner will have to invest in order to renovate the premises. HUD may sometimes offer an allowance to upgrade the property or for moving expenses or a bonus for the early closing of the sale. The buyer can also request the department to pay a part of the closing or financing cost. Consult with your real estate agent or a HUD code attorney to get more details on what you are eligible for. It is also imperative to get the home inspected by a professional engineer so that you can get a fair idea about the amount of money that will have to be spent to upgrade the home and submit an appropriate bid.

Can I get a loan to buy a HUD home?

HUD does not offer loans directly; however there are several mortgage programs that HUD endorses. There is a lot of information about these lenders on the HUD website, you can read up and get in touch with these HUD approved lenders, so that they can take you through the right steps and ensure that you have good chance of getting the loan.

How can I find out about the HUD homes for sale in my area?

There are several websites that offer information on HUD homes try searching with the help of a search engine. Also, you should be able to find out about the HUD registered real estate agents in your area. It is important t consult with a HUD code attorney and a registered real estate agent when purchasing HUD properties. They are well versed in the requirements, limitations and possible issues that you may face while and after buying a HUD home.

Seomul evans is a SEO Services consultant for California Hud Code Attorney

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Disclaimer: This communication is provided to you for informational purposes only and should not be relied upon by you. RE/MAX Results is not a mortgage lender and so you should contact a mortgage broker or lender directly to learn more about its mortgage products and your eligibility for such products. Regarding specific blog postings, external links and any other information found on this site, neither John Mazzara nor RE/MAX Results assumes any responsibility nor guarantees the accuracy of this information and is not engaged in the practice of law nor gives legal advice. It is strongly recommended that you seek appropriate professional counsel regarding your rights as a homeowner. John Mazzara and RE/MAX Results are not associated with the government, and our service is not approved by the government or your existing lender. Even if you accept this offer and use this site and/or our services, your lender may not agree to change your loan should you decide to pursue a short sale or any other change involving your loan or loan terms and conditions. If you should decide to engage our services in marketing your home as a short sale, there will be no up front cost to you and you may cancel our listing contract at any time.

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