What is a HUD Home?
HUD homes are residential properties acquired by HUD (Housing and Urban Development) due to foreclosure action on an FHA-insured (Federal Housing Administration) mortgage. When a loan insured by them goes into default and forecloses, the lender may file a claim against the FHA Insurance Fund. HUD then becomes the owner and puts the property up for sale to recover the loss on the foreclosure claim.
Buying a HUD home
Buying a a home is a great decision, one of the most important ones you’ll ever make. Understanding not only HUD homes, but purchasing a home, in general, is a good way to start. Here is information to help you start that process.
Finding the Home
That’s the fun part of the process. Even though it’s great to check out what’s available on the market, buying a home is a serious matter. These videos will help explain the process from finding the right home, to loan process to closing the deal! This link to the HUD Home Store links will help you find the right HUD property. If you have any questions or are looking for a Realtor, feel free to contact me.
Don’t be intimidated about homes that need a little TLC. With the right loan you can turn a HUD property or other home into the home of your dreams.
Photo courtesy: Cuyahoga County Land Reutilization Corporation
Have you ever watched HGTV? They will take a rundown home that needs a lot of work (has a fantastic price – Hello!!!), and the hosts turn that property into the pride of the neighborhood. A 203k FHA renovation loan can help you do just that. It is an FHA mortgage insurance program that enables home buyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan.
Here are some benefits of FHA 203k mortgage loan program:
Get More Home For Less
- Since the house needs work you can purchase it for less than a property that is in move-in condition
- Because houses that need work are usually on the market much longer than a house in move-in condition and receive few purchase offers, the list price is more likely lower from the original offer price
- This type of loan is perfect for homeowners that like a neighborhood but can’t find a house in an acceptable condition that they can afford
- The mortgage amount may be significantly less than the “after completed value” of the property, which means that the new homeowner will have equity when they buy their new house
Update, make repairs and and additions immediately after the house is purchased
- Deficiencies to a property are often identified in the home inspection and appraisal report, which you want repaired to pass the bank’s appraisal to approve the loan.
- A repair budget is made that guarantees that repairs to the property are made within six months of the buyer purchasing the home. This meets the lenders and FHA requirements regarding the safety condition of the subject property
- This loan can also be used to give the house “bling,” modernizing and personalizing the house to meet the new homeowners “wants and needs list.” The repairs can be made right away so the repairs aren’t put off until down the road when the money is saved – or worse, charging it on a credit card
In order to get you inspired to see the possibilities check out Property Brothers on HGTV. Are you inspired? Great! Check out local homes in Virginia Beach, Chesapeake, and other areas in Hampton Roads.
In order to find out more about the FHA 203k loan program, contact me for more information.
If you have a home to sell, click here to find out what it is worth in today’s market.
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