02 May 2010

HUD 101

HUD definition
abbr. Department of Housing and Urban Development

What is a HUD Home?
A HUD home is a 1-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Who can buy a HUD Home?
If you have cash or can qualify for a loan (subject to certain restrictions, of course) you may buy a HUD home. HUD homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

How are HUD Home Sold?
HUD homes are offered for sale at fair market value, based on recent appraisal. Generally, HUD homes are sold in what is known as an "Offer Period", during which a potential buyer's offer must be made. At the end of the Offer Period, all offers are opened and the bid providing the highest acceptable net return to HUD may then be accepted.

What About Financing?
HUD does not provide direct financing to buyers of HUD homes. Buyers must obtain financing through either their own cash reserves or a mortgage lender. If you have the necessary available cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD home.

Where Can I Learn About Available HUD Properties in the Area?
Ask me! I would be happy to present a list of HUD homes to you.

For additional information, see www.hud.gov.

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