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Frequently
Asked
Questions
Q: What's a HUD home
A: HUD homes
can be a very good deal. When someone with mortgage insured by HUD
cannot meet their payments, the lender forecloses on the home. HUD then
pays the lender what is owed and takes ownership of the property. Then,
HUD sells the home at market value as soon as possible.
Q: Who can buy a HUD
home?
A: Anyone can buy a HUD home. These homes are not only for
low-income buyers. However, most are in affordable price ranges for
low- to mid- income purchasers. If you have the cash available or can
qualify for a mortgage, you can buy a HUD home.
Q: How can I buy a
HUD-owned property?
A: The best
way is to call a real estate broker or agent in the area where you want
to buy a HUD home. In most cases, HUD homes are sold in an offer
period. At the end of that period, all offers are opened and the
highest bid is accepted. If the home is not sold in the initial offer
period, you can submit a bid on any business day.
Q: If my bid is
accepted, then what happens?
A: Your real
estate agent should help you through the paperwork. You will be given a
settlement date, normally within 30-60 days, where the transaction will
be finalized.
Q: Does HUD make
repairs to these homes prior to sale?
A: HUD homes
are sold "as-is," without any warranty. That means HUD will not usually
make repairs except in cases to eliminate a major safety or health
problem. Some of these homes may not be in good condition. However, all
known defects in the condition of the house are reflected in the
purchase price. The home should be professionally inspected after you
bid on it.
Q: Does HUD pay any
costs toward my purchase?
A: It depends. In some states, HUD will pay up to a certain
percentage (around 2%) of your closing costs.
Q: Are HUD homes
meant for buyers with low incomes?
A: HUD homes
range in price, but many are affordable for low- and mid-income buyers.
Q: Can HUD homes be
purchased as an investment?
Most HUD homes are offered on a priority basis to owner-occupant
purchasers. That is, people who are buying the home as their primary
residence. Following that priority period, properties that are still
unsold are available to all buyers, including those buying for
investment purposes.
Q: Where can I get a
loan to buy a HUD home?
A: HUD does not make loans directly. But there are a number of
mortgage lenders that can help you buy a home. Visit our mortgage information page for listings. We
also provide a mortgage calculator
for figuring out your monthly payment.
Q: I've heard
there's a program for teachers? For firefighters and EMTs?
A: That's right, HUD does have a program for educators and some
public service employees. It's
called "Good Neighbor Next Door", and it allows qualified individuals
to
purchase a HUD home for half of the listing price. There are FHA
mortgages in place for the TND program that require only a $100.00
downpayment. More information on
Good Neighbor Next Door.
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Q: What is a VA home?
A: Much like
HUD homes, property that is financed using a VA guaranteed loan and is
foreclosed on due to non payment of the loan is reposessed by the VA
and sold at market value.
Q: Do I have to be a
veteran to purchase a VA-owned property?
A: No. All
VA properties are available for sale to both veterans and non-veterans
alike.
Q: How can I buy a
VA-owned property?
A: The best
way is to contact a real estate broker or agent in the area where you
wish to purchase the home. Brokers have the responsibility of showing
VA properties to prospective buyers and preparing purchase offers for
the properties.
Q: Will the VA
finance a purchase of the property?
Yes, financing is available for most, but not all, property sales. With
VA financing, the down payment requirements are usually very
reasonable, and the interest rate is established by VA based on the
current market conditions. However, any purchaser who requests VA
financing to purchase a VA-owned property must have acceptable credit
and income to meet the loan payments, maintain the property, and pay
all taxes, insurance, utilities and other obligations. The purchaser
also must have enough funds remaining for family support. Often, due to
VA stipulations, it is better to use outside financing. |
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