How to Buy a HUD Home
Are you interested in buying a HUD home in Baltimore? Do you want to know how to buy HUD homes for investing? There’s a lot to know about how to buy a foreclosed home, and below, you’ll find a wealth of information as a place to get started.
To search for HUD homes, visit HUD Home Store. This is the listing site for HUD real estate owned (REO) single-family properties; this site provides the public, brokers, potential owner-occupants, state and local governments and nonprofit organizations with a centralized location to search the inventory of HUD properties for sale.
Also, registered real estate brokers and other organizations can place bids on behalf of their clients who would like to purchase a HUD property. The HUD Home Store also offers several informative user-friendly features that provide important advice and guidance for consumers on the home buying process.
Frequently Asked Questions (FAQs) are available online for:
|Real Estate Agents|
|Members of the Mortgage Industry|
|Nonprofit Organizations and Government Entities|
What is a HUD Home?
A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage.
When a home is foreclosed on, HUD becomes the property owner and offers it for sale in order to recover the loss on the foreclosure claim.
The information below provides an introduction on the HUD homebuying process:
|Buying a HUD Home|
|FHA Special Discount Sales Programs|
|Available HUD Properties|
Who Can Buy a HUD Home?
If you have the required cash or qualify for a loan, then you can buy a HUD home!
HUD homes are are first offered to owner-occupant purchasers (people who would be buying the home as the primary residence). Then, unsold properties become available to all buyers, including investors.
Should I Get a Home Inspection?
HUD does not warrant the condition of its properties, and will not pay for the correction of defects or repairs. As the new owner of the HUD home will be responsible for making repairs, HUD strongly advises ALL potential homebuyers to get an an inspection from a licensed professional home inspector PRIOR to submitting an offer to purchase.
Interested in acquiring a HUD home that needs repairs?
Basically, when a homebuyer wishes to purchase a house that need repairs, the homebuyer needs to obtain financing to purchase the home, more financing to do the renovation construction, and a permanent mortgage once the work is completed. Often, the acquisition and construction loans involve relatively high interest rates and and short amortization periods.
FHA's 203(k) Rehabilitation Loan is designed to address this situation.The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property.
What About HUD Financing?
HUD does not provide direct financing to buyers of HUD homes. Buyers must get their own financing either through their own cash reserves or through a mortgage lender.
If you already have the cash or you can qualify for a loan, then you can buy a HUD home. Or, you may also qualify for an FHA-insured mortgage to finance the purchase.
Does FHA Offer Any Special Discount Sales Programs?
FHA REO properties located in designated Revitalization Areas are available at a reduced sales price to law enforcement officers, teachers, firefighters, emergency medical technicians, nonprofits and local governments.
Where Can I Find HUD Properties Available to Buy?
Before it’s listed for sale, any single family property acquired by HUD FHA will display a sign identifying who is managing the property. During this time, the property will be appraised, title issues are resolved if necessary, and a determination is made about the property's eligibility for HUD's discount sales programs.