Understanding HUD Homes
The Department of Housing and Urban Development (HUD), established a program providing quality housing and countless opportunities for prospective buyers who are either new homeowners or seasoned investors.
To understand how a HUD home is acquired, let’s discuss why a HUD home becomes a HUD home. Before HUD homes become such, it is first purchased using an FHA loan by a qualified buyer. Once the owner is unable to make the monthly mortgage and defaults on the loan, FHA will pay for the property using the mortgage insurance attached to the FHA Loan and acquire the property from the servicer. Once this property is deeded to HUD, the government-owned home is then placed for sale. The properties are appraised before placed on the market so you have a good idea of the worth of their current condition. HUD homes are sold as-is, hence no repairs nor renovations are done before the sale.
There are certain criteria that determine the eligibility of a person to acquire a HUD home. Although HUD encourages any buyer to place a bid, HUD typically will give first bidding priority to owner-occupant buyers for the first 15 days as long as the property is insurable. During this first bidding round only owner occupants may place a bid if utilizing the home as their primary residence. Also, the buyer must not have acquired a HUD home in the past two years.
To view or set up an appointment to walk through the home, a buyer must use the services of a licensed real estate agent. If HUD determines that there is no acceptable offer during the owner occupant period, HUD extends the bidding process opening the opportunity for investors to place a bid typically on day 16.
If you’d like to see available HUD homes in your area, give us a call as we are HUD certified agents ready to assist you in your next home purchase. The Stephanie Woods Team Better Homes and Gardens Real Estate BloomTree Realty 928-237-4455 prescottazhomefinder.com