PURCHASING A HUD HOME
What is a HUD home? The Federal Housing Administration (FHA) provides federal mortgage insurance. If a home is foreclosed on that was purchased with a loan insured by the FHA, the lender can file a claim for the balance due on the mortgage. FHA will pay the lender's claim and then transfers ownership of the property to the Department of Housing and Urban Development (HUD). HUD sells the foreclosed home.
Will HUD make the repairs? HUD homes are strictly sold as-is. All repairs and improvements are the responsibility of the new owner after closing.
How do I find a HUD home? You can view HUD listings on www.HudHomeStore.com. In order to see a HUD home, you must contact a HUD approved licensed real estate agent such as Home Experts Realty.
How do I make an offer to purchase a HUD home? You must be represented by a Realtor to bid on HUD homes. HUD foreclosures are sold using an online bidding process. During the Initial Bid Period, all bids are sealed until after the bid deadline. This bid period is typically for Owner Occupant Buyers only. The next business day following the bid deadline, all offers are opened and the highest bid is accepted. If the home does not sell during the initial bid period, the bid deadline is daily at midnight and bids are opened the next business day. Your Realtor will be notified only if your bid is accepted.
Does HUD finance the home? HUD does not finance homes. Your Expert Realtor can assist you with finding financing for foreclosed homes.
Do I need to have a home inspection? For your protection, HUD recommends a home inspection but it is not required. Even though HUD homes are sold as is, the whole house inspection will give you a better idea of what repairs are needed so that you are prepared after closing.
Can investors purchase HUD homes? During the initial bid period, usually only owner occupant buyers can bid on HUD homes. If an owner occupant does not bid on the home, the bidding is opened to investors after the period deadline.