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.
2: Who can buy a HUD home?
If you have the cash or can qualify for a mortgage, you can buy a HUD home. HUD
employees and relatives of HUD employees are eligible, but must receive written
approval from the Director of HUD's Office of Single Family Asset Management in
order to purchase a HUD-owned single family property. HUD employees should refer
to paragraph 10-29C of Handbook 4310.5, REV-2, Property Disposition Handbook-One
to Four Family Properties for the exact requirements to purchase a HUD-owned single
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.
3: Is it true I can get a HUD Home for a dollar?
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.
4: If the HUD Home needs repairs, will HUD make them?
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: Start by finding a participating real estate agent.
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.
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. We have an excellent booklet to help you
understand the settlement process: "Buying
Your Home - Settlement Costs and Helpful Information
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%.
7: How can I find out what HUD Homes are for sale?
Answer: On HUD's website or by contacting Yamon! Investments, Inc. We update our
lists of HUDHomes for sale every day. If you see one that interests you, contact
one of the real estate agents in your area who shows HUD homes. They can help
you from there.
Question 8: How can I get a loan
to buy a HUD Home?
Answer: HUD doesn't make loans
directly. But we do have a number of mortgage insurance programs that could help
you buy a home. You can read about those programs
here. Then contact 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
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.
10: Is there anything else I should know about HUD Homes?
Answer: HUD encourages every homebuyer and homeowner to be a wise consumer, so
be sure to read their consumer information. Houses built before 1978 may have
lead-based paint, which can cause harm to your family; so be sure to read about
this hazard and about what you would need to do to correct it. Teachers and law
enforcement officers qualify for 50% discounts in certain situations.
Nonprofits and Government Agencies!
HUD has a special sales program under
which approved nonprofit organizations and government agencies may purchase properties
at discounted prices for use in local housing or homeless programs.