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Types of HUD Homes
FHA (HUD homes) foreclosures are not like other types of
foreclosures, since it is possible to buy a property a with low down payment
or no money down. The Federal Housing Administration lists the homes
that they are selling in four different ways.
IN = Insured
Properties listed "IN" qualify for FHA
financing. The home meets MPS (Minimum Property
Standards) and the house in is currently in livable condition.
There should not be any MPS repairs necessary.
IE = Insured with Escrow
Properties listed "IE" are eligible for
FHA financing with repairs to be completed by the purchaser after the close
of escrow. These repairs must be Minimum Property Standard (MPS)
Repairs totaling less than $5,000. MPS Categories include: roof,
structure, and mechanical systems, such as plumbing, electric, and heating.
A listing posted inside the property will indicate actual repair amounts.
The cost for the repairs
is not
paid by HUD; however, the buyer may finance the repair escrow
amount in their mortgage. The lender is responsible for inspections of the
repairs and authorizing release of funds. REPAIR ESCROW ONLY APPLIES
TO FHA FINANCING – not cash or conventional transactions.
IC = Insured with Conditions (Such as
systems checks)
Properties listed "IC" qualify for FHA
financing, but will require systems checks and inspections by licensed
contractors to assure that the mechanical systems, roof and structure are in
good condition.
UI = Uninsured
Properties listed "UI" indicates a home requires
repairs in order to meet FHA standards and that the house in question is
currently not in livable condition. They
generally are in need of extensive repairs and are usually
purchased with cash or conventional financing. The only type of FHA
financing they may qualify for is a FHA 203(k) loan. 203K FHA
financing is a rehabilitation loan for owner occupants purchasing properties
that have over $5,000 dollars worth of MPS repairs. Not all UI properties
will qualify for FHA 203(k) financing. |
