HUD Homes are a unique way to purchase property. People can be confused about what a HUD Home is, so let’s get that out of the way first. A HUD Home is simply a foreclosed home that the federal government is responsible for selling, that’s all they are. So basically, it’s a foreclosed home, not unlike any other foreclosed home in that the utilities will probably be off, the home is most likely in a state of distress, the seller has no idea what kind of problems might exist in the home- just like when a bank sells a home. The difference is that rather than submitting an offer to the listing agent, who then presents the offer to the bank, with a HUD home you submit an offer to purchase via an electronic bidding system. And because it’s the government, there are reams of paperwork to fill out, other than that, think of these as foreclosures.
Here’s the good news/bad news of HUD homes: if you are an investor, a HUD home can be difficult to purchase. The reason is because many of these homes are only made available to owner occupants, that is, someone who will be living in the home themselves, rather than a landlord who is going to rent the home. The good news is that if you are an owner occupant, you get some of the best HUD homes reserved for you, without having to compete with investors.
Also, owner occupants can use the FHA 203(k) loan. This is sometimes referred to as a “renovation loan” and is a specialized loan that allows borrowers to roll the cost of renovations in with the mortgage, so all those repairs that need to be done? Get them financed with an FHA 203(k) loan, have the work done in a timely manner by professionals, and own the home you want, rather than the home you will settle for.
Want details? Bigger Pockets has a very informative post about HUD Homes, and you can find HUD homes here. When you are ready to find out more about HUD homes or the 203(k) loan, contact me, Theresa Lussier, THE HOME GROUP REALTY, 937-478-7781.