10 Things Good To Know When Buying A HUD Home

1.    What is a HUD Home? Actually a great question. A HUD Home is a home that had a Loan that was insured by the Federal Housing Authority (FHA). So pretty much owned by the tax payers

2.    I am an investor can I buy a HUD Home? The first answer is maybe. All HUD Homes are first offered to owner occupants for the first ten days. If there are no acceptable bids then HUD will offer it to all bidders.

3.    I am a First Time Buyer (FTB), do I get any special deals on a HUD Home? The answer is no because you are a FTB, however there are sometimes deals that are offer in an "Officer Teacher Next Door" program. That will be discussed in a future post

4.    How do you buy a HUD Home? You go to a HUD approved Real Estate Agent and they help you prepare the paperwork and then you actually submit a bid online.

5.    Will HUD Pay closing cost? HUD will allow some of the closing cost to be paid. However know that if you are adding the closing cost to your bid price and some of those items are not paid by HUD, you do not get a rebate. So make sure Loan Officer and Realtor have HUD Experience.

6.    If we are bidding online do we have to Earnest Money? Yes. $1,000 for properties listed over $50,000 and $500 for those that are $49,999 and under. It must be a cashier's check or some other form of cleared funds made to the Dept of HUD.

7.    Can I buy a HUD Home with an FHA loan? Yes, but please know that any amount bid over the list price must be paid in cash. FHA will loan any amount over their list price.

8.    How does HUD determine their List Price? HUD uses appraisers to give what is called a ten day appraisal based on the Salt Lake Markewt  Meaning what price will cause it to sell in ten days.

9.    Can you bid lower than the asking price on a HUD Home? Yes you can. Typically HUD Homes in Salt Lake that are in decent shape and depending on the area usually go for more than list price. The list price is usually aggressive enough to cause multiple offers and therefore drive up the price to full market value.

10. What does HUD stand for? The United States Department of Housing and Urban Development, it is a Cabinet department of the United States government. Although its beginning...  more about HUD