- What is a "HUD Home"?
Answer:
When someone with a HUD insured mortgage can't meet the payments,
the lender forecloses on the home; HUD pays the lender what is
owed; and HUD takes ownership of the home. Then they sell it at
market value as quickly as possible.
- Who can buy a HUD home?
Answer: Anyone! If you have the cash or can qualify for
a mortgage, you can buy a HUD home.
- Are HUD Homes meant for people with low incomes?
Answer: HUD homes range in price, but most are affordable for
low- and moderate-income Americans.
- Is it true I can get a HUD Home for a dollar?
Answer: No. HUD sells homes at market value - that means
that the price is set based on the price of similar homes sold
in the area.
- If the HUD Home needs repairs, will HUD make them?
Answer: HUD Homes are sold "as-is," without warranty.
That means that HUD will not pay to correct any problems.
But even if a HUD Home needs fixing up - and not all of them do -
it can be a real bargain! For example, HUD's asking price on
the home will reflect the fact that the buyer will have to invest
money to make improvements. HUD might offer special
incentives such as an allowance to upgrade the property, a moving
expense allowance, or a bonus for closing the sale early.
And keep in mind that on most sales, the buyer can request HUD to
pay all or a portion of the financing and closing costs.
Rod at LYNX Properties can give you all the
details. HUD encourages you to get the home professionally
inspected before you make an offer, so you will know what repairs
you may have to make BEFORE you submit your bid.
- How do I buy a HUD home?
Answer: Start by finding a participating real
estate agent. Your real estate agent must submit your bid for you.
Normally, HUD Homes are sold in an "Offer Period." At the end of
the Offer Period, all offers are opened and, basically, the
highest bid is accepted. If the home isn't sold in the initial
Offer Period, you can submit a bid. Bids can be submitted any day
of the week, including weekends and holidays. They will be
opened the next business day. If your bid is acceptable to HUD,
your real estate agent will be notified, usually within 48 hours.
- If my bid is accepted, then what happens?
Answer: Rod at LYNX Properties will help
you through the paperwork process. You'll be given a settlement
date, normally within 30-60 days, where the transaction will
occur. HUD has an excellent booklet to help you understand
the settlement process - contact Rod at LYNX
Properties for more information.
When you buy a HUD Home, your agent's commission is usually paid
by HUD. HUD will pay a total sales commission of up to 6%, due to
the extra work required on the part of your agent when selling a
HUD home.
- How can I find out what HUD Homes are for sale?
Answer: Contact Rod at LYNX
Properties
as HUD updates their list of homes every day. If you see one that
interests you, contact Rod, as he can
show you HUD homes that may be available in your area. He
can help you from there.
- How can I get a loan to buy a HUD Home?
Answer: HUD doesn't make loans directly. But they do have a
number of mortgage insurance programs that could help you buy a
home. You can can contact Rod who has
mortgage lenders he works with who walk you through the steps and
actually make the loan.
- Can I buy a HUD Home as an investment?
Answer: Most HUD Homes are initially offered on a
priority basis to owner occupant purchasers (people who are buying
the home as their primary residence). Following the priority
period, unsold properties are then available to all buyers,
including investors.
- Is there anything else I should know about HUD Homes?
Answer: We encourage every homebuyer and homeowner to be a
wise consumer, so be sure to ask Rod
to inform you of various laws, disclosures and paperwork necessary
to purchase. Things like lead paint, which can cause harm to
your family need disclosing on homes built prior to 1978, so
be sure to read about this hazard and about what you would need to
do to correct it.
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