HUD homes typically offer you attractive down payments, simpler qualifications and minimum closing costs. Finding HUD homes is also fairly simple, thanks to online listings and traditional classified advertisements. These homes are residential properties that were foreclosed and were covered by the Federal Housing Administration (FHA). The U.S. Department of Housing and Urban Development (HUD) then owns the home and manages its sale to be able to recover the amount lost through taxation.
The Way HUD Homes are Sold
Most licensed real estate agents are entitled to advertise and sell HUD homes and can help potential buyers throughout the offer and purchasing process. The broker’s commission is typically paid by HUD. The inventory cost is equal to the property’s fair market value, and the sale includes an offer period. After the offer period finishes, submitted bids are opened, and the maximum bid generally is accepted by HUD.
Funding for HUD Homes
HUD homes don’t come with readymade financing bundles. In fact, HUD does not provide funding, but the Federal Housing Administration (FHA) does. Buyers needing funding for a HUD property must pay with money or secure financing through an external lender–possibly a bank or mortgage company.
HUD Homeownership Centers
HUD manages Homeownership Centers, which are available to help owners and buyers with a variety of providers, including the selling of HUD homes. In California, the Santa Ana Homeownership Center works together with clients in California, Alaska, Hawaii, Arizona, Nevada, Washington, Oregon and Idaho. To learn more, call FHA at 800-225-5342.
The Loan Process
Determining just how much you should pay to get a HUD home is similar to determining just how much you can afford with any home purchase. You must think about your expenditures, your income, amount of your deposit and the present interest rate. When it comes to shopping for a mortgage, be prepared to compare and negotiate. HUD homes frequently are mortgaged through FHA, but you must meet specific qualifications.
If you want to know more about purchasing a HUD home and learning more about FHA finances, seek the help of a real estate agent or broker who can assist with bids and offers. The California Home Finance Agency also provides assistance to first-time buyers trying to secure a mortgage. To learn more, contact the bureau at 877-922-5432.