Few first time homebuyers are aware of the fact that the U.S. Department of Housing and Urban Development (HUD) has an extensive list of homes for sale. There are many advantages to purchasing a home from HUD including special financing programs and special discount sales for qualified buyers.
HUD properties for sale are 1 to 4 family residential properties that were acquired as a result of foreclosures after borrowers with FHA insured mortgages defaulted. All of the homes offered for sale by HUD are listed on the HUD Home Store website. Potential buyers can search by state and county and view the property information as well as contact details for making an offer.
HUD has properties listed nationwide. A quick search of the HUD site revealed that there are 68 homes listed for sale in Connecticut and 311 homes listed for sale in Florida.
HUD owned property
Some of the most frequently asked questions about homes for sale by HUD are discussed below.
Who is eligible to purchase HUD owned property?
Almost anyone, including investors, are eligible to bid on a HUD owned property. Buyers who intend to occupy the property have the right to bid first before investors. Purchasers can pay cash or apply for financing if their bid is accepted.
What condition are the homes in?
Since these are foreclosed homes, many may need repairs or have deferred maintenance. HUD basically offers the properties “as is” and will not pay for defects or needed repairs. Therefore, buyers are strongly encouraged by HUD to obtain a thorough home inspection. In order to make necessary repairs, homebuyers can take advantage of the FHA 203(k) Rehabilitation Loan program which provides financing to make necessary repairs or upgrades.
How can I obtain financing to purchase a home from HUD?
Purchasers normally pay in cash or with a mortgage obtained from a bank. HUD does not provide direct mortgage financing but qualified purchasers can apply for an FHA mortgage which requires only a 3.5% downpayment.
Does HUD offer any special price discounts on the homes listed for sale?
Certain purchasers can take advantage of the FHA Special Discount Sales Program for properties located in designated “revitalization areas”. This program is available to teachers, law enforcement officers, firefighters, emergency medical technicians, nonprofits and local governments.
Considering the special buyer discounts and special FHA financing available, the HUD Home Store may be a good starting point for many first time homebuyers searching for the right home.