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So, You Want to Buy a HUD Home...

Posted by Tina Merritt on 8/19/2009 at 6:52 AM
Posted in Real Estate Investing

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What is a HUD home?

HUD stands for the Department of Housing and Urban Development. HUD is the insurer for the FHA loan program. When a FHA borrower defaults, the home becomes a "HUD" home, which you can buy. HUD homes are residential properties with 1-4 units.

How do I get a list of HUD homes for sale in my area?

Go to this site: http://www.hud.gov/homes/index.cfm and click on your state to find the homes available in your area. This is the MOST accurate place to find HUD homes. It is not necessary to pay or subscribe to a service for this information.

Who can I buy a HUD home?

Anyone with cash or who can qualify for a mortgage. HUD homes are initially released to owner-occupant buyers only. If they do not sell during that initial period, then they are open to all purchasers, including investors. If you will be obtaining financing to purchase a HUD home, a copy of the lender's pre-approval letter must accompany the offer package.

How do I bid on a HUD property?

You place an offer, or a "bid" on a property through a HUD registered broker as listed on the website. It's wise to find a broker who is experienced in dealing with HUD as the process is very different from the traditional way of purchasing a home. The earnest money deposit (escrow) must be held by the Broker in the form of certified funds in order to submit the bid.

Will HUD give me money to fix up the home?

No. HUD homes are sold "as-is" without any warranties. It is wise to inspect each HUD home prior to submitting a bid.

When I buy a HUD home, will HUD pay any closing costs?

Yes. When you submit your bid, you can request closing cost assistance. This amount will be subtracted from the total net to HUD, which will help determine which bid HUD will accept (if there are multiple bids).

Tina Merritt is an 11 year veteran Real Estate Agent and Trainer based out of Virginia Beach, Virginia. She holds a degree in economics from Virginia Tech and post-baccalaureate from Virginia Commonwealth in real estate and land development. As an avid social networker and internet marketer, Tina helps real estate agents, loan officers and affiliated industries embrace technology. As a real estate agent, Tina primarily deals with marketing and selling properties deemed "hard to sell" and also works with real estate investors helping them build and/or liquidate their portfolios for maximum profit.

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3 Comments

Posted by Rachael Sutton #1253595 on 08/19/2009 6:48 PM

Thank you Tina, this is helpful. I used to help a private contractor who would inspect, secure and clean these units prior to sale. It is definitely important to walk through them before making a commitment. Expect them to need some work too. One other caution - have them tested for Meth residue. If the home was used for the manufacture of Meth, it will be costly to clean, and can be fatal to leave in a residence.

Posted by member1989276 on 08/20/2009 1:25 AM

One of the best investment to acquire is home , it is life time and you can save a lot as compared to renting apartment or boarding houses. Home funds can be used in a broad range of eligible activities, all with the general purpose of providing affordable housing. Nevertheless, HUD has specified certain eligible activities which all governments can perform in order to achieve the objectives listed above. It is indeed worth to have a short term loan to avail a very affordable housing program.

For more info visit: http://personalmoneystore.com/moneyblog/2009/08/18/blind-zone-mirror/

Posted by member11015571 on 09/16/2009 11:50 AM

Will HUD give me money to fix up the home?
Yes. http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

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