How To Buy A HUD Home

HUD does not foreclose or repossess properties. HUD acts as receiver after the foreclosure process occurs. The Management and Marketing Contractor begins the process of selling the property according to HUD guidelines. Any qualified purchaser can offer to buy a HUD home, regardless of who the person is. Before making an offer, prospective buyers must be pre-approved by a mortgage lender.

Cash buyers must provide proof of available funds.
(1) Locate properties that interest you by checking out the free listings in your area on the Internet. U.S. Department of Housing and Urban Affairs

You can ask a realtor to pull up listings of properties in your area (REO’s) Drive by the properties and check them out from the outside and decide if the neighborhood is to your liking. If this is an investment property you want a blue-collar area with many similar homes.

2) Have a HUD approved real estate agent show you the inside of the property. Have the agent show you comparables of similar properties that have sold in the area. Estimate the repairs and based on the information supplied by the agent determine how much you want to bid on the property.
(3) All HUD homes are sold by electronic bid. If you are the successful bidder you have up to 45 days to close on the home or you can apply for an extension to get more time to line up financing.
(4) The Federal Housing Administration (FHA) is the best source for financing. The FHA 203(b) loan or FHA 203(k) loan may be used. The beauty of theses programs is a lower interest rate that includes funds for repairs.
There are some tips and secrets to buying HUD properties that increase your odds of finding a profitable deal.

Author, Mike Henderson, MBA is an experienced, investing realtor and educator.
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