Why HUD Homes Exist
What is the definition of a HUD home? A HUD home is a home that was backed by the Federal Housing Administration (FHA). A HUD home is a home now in foreclosure. The lending mortgage company has deeded the house back to the Federal Department of Housing and Urban Development (HUD). HUD will be involved in trying to sell the home to recover any money lost.
Who Can Buy a HUD Home?
Anyone can buy a HUD home. As long as the interested person has enough money or can qualify for a loan, he can buy a home. The only catch is that preference is given to those who are buying the homes for their primary place of residence. The homes are offered for sale first to those who want to buy the homes to live in them. If they are not sold, they are offered for sale to all potential buyers, including developers.
Those who have been displaced by Hurricane Katrina, Hurricane Rita, or Hurricane Wilma, may buy HUD homes at a discount.
How Are HUD Homes Sold?
If you have ever wondered what is the definition of a HUD home, they are listed online. Those trying to sell the homes are under contract to HUD. If you want to buy a HUD home a licensed real estate broker who is registered with HUD may give an offer for you. Even the real estate broker’s commission will be paid by HUD.
All homes are offered for sale at fair market value. This is determined by a recent appraisal. At the end of the offer period, all bids are opened. The highest acceptable one is accepted. If there has not been a sale, the home will be offered for sale on an “extended” basis. This means means bids may be placed at any time on a business day. If one of those bids is accepted, the buyer will be notified within 48 hours.
While the homes are offered at fair market value, there are special discount programs through HUD for low income and other people who are in certain categories.
Continue learning more about HUD homes as the article What is the Definition of a HUD Home continues on page two.
What is the Definition of a HUD Home - Continued
How Can I Find Information About HUD Homes for Sale?
Those who have wondered, “What is the definition of a HUD home?”, may now wonder how to find information about such homes. If any property is acquired by HUD, a sign will be displayed, identifying who is managing the property. Before the house is actually listed for sale, a determination will be made that house should be avalailable for HUD’s discount programs.
The house will then be listed on the portion of the HUD site dedicated to listings. You can search by state to find such properties. The site will also help you find a housing counselor, who can place a bid for you.
What Types of Discount Programs Are Offered by HUD?
The discounts already mentioned for hurricane survivors, as well as survivors of Hurricane Gustav, are not the only discount programs offered by HUD.
Homes are offered to law enforcement officials, firefighters, teachers, nonprofits, emergency medical technicians, and local governments in revitalization areas.
These programs are referred to as “dollar homes” and “sales to nonprofits.”
Dollar homes are single family homes that offered to low and moderate income familes at $1 each. If the homes are on the market for six months, the communities may fix them and make use of them at a considerable savings. They are used for community revitalization.
Homes are offered to faith and community nonprofit organizations through “sales to nonprofits.” The agencies may buy the homes at a 30% discount. The agencies may then sell the homes to low and moderate income individuals. If you buy a HUD home, you might realize huge savings.
Does HUD Help With Financing?
HUD does not provide direct financing to those who buy its homes. Buyers must either use a mortgage lender or their own cash. Buyers may qualify for an FHA-insured mortgage, however, and this link will help you find such lenders in your state.
Is a HUD Home For You?
Now that you understand what is the definition of a HUD home, you may be wondering if such a home is right for you. The information on the HUD site to help you make an informed decision.