Question 1: 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 we sell it at market value as quickly as
possible.
Question 2: Who can buy a HUD home?
Answer:
Anyone!
If you have the cash or are pre-approved for a mortgage, you can bid on a HUD home.
Question 2: 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.
Question 3: 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.
Question 4: 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. Your real estate agent will have details. We encourage 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.
Question 5: How do I buy a HUD home?
Answer: You must use a real estate agent to buy a HUD home and you
must be
pre-approved or have cash to bid on a home.
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 reasonable
bid is accepted. If the home isn't sold in the initial Offer Period, you can
submit a bid until the home is sold. 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.
Question 6: If my bid is accepted, then what happens?
Answer: Your real estate agent will help you through the paperwork
process. You'll be given a settlement date, normally within 30-60 days, by
which you need to arrange financing and close the sale, or forfeit your
earnest money deposit, or pay for an extension of your sales contract.
When you buy a HUD Home, the selling agent's commission will be paid by HUD
but only if you make this a condition of your offer. The listing agent's
commission is always paid by HUD. HUD will pay a total sales commission of
up to 6%.
Question 7: How can I find out what HUD Homes are for sale?
Answer: Right here! We update our lists of HUD Homes for sale every
day. If you see a home that interests you, click on "Details" link located
left of each home listing.
Question 8: How can I get a loan to buy a HUD Home?
Answer: HUD doesn't make loans directly. Real estate agents will
refer you to a HUD approved lender, who will take you through the steps and
actually make the loan.
Question 9: 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.
