The Federal Housing Administration (FHA) insures mortgage lenders who make FHA loans.  The FHA is part of Housing and Urban Development (HUD). 

What happens when a homeowner defaults on an FHA mortgage?  The home, after going through a foreclosure procedure, reverts to HUD, where it will eventually be resold.

How do I buy a HUD repossessed home?  In Pennsylvania, including Lancaster County, HUD properties are administered by Hooks Van Holm, Inc.  The first thing you need to do is locate a REALTOR who is certified to work with HUD properties.  Hooks Van Holm displays available properties online at www.hooksvanholm.com/ .  A HUD-certified REALTOR can show you these properties.

All HUD repossessed properties must be bid for online.  There is a very detailed process which must be followed precisely, or the bid will be rejected.  Most residential properties start out for a short period being only available to owner occupants.  If not sold in the initial period, the properties then become available to any owner, including investors.

How credit worthy do I have to be?  You must be preapproved BEFORE you make your bid.  You must already have a preapproval letter on your lender's letterhead.  There are specific instructions as to what information must be on the preapproval letter.

Can I have a home inspection?  Yes.  However, all HUD propertis are sold as is, with no warranties.  The only way an owner-occupant can be released from a HUD contract is if there is a serious occurrence, such as a death in the family or a loss of job.  Investors will not be released for any reason.

If your bid is accepted, the settlement generally must take place within 30 to 60 days, usually less than 45 days.  There is a daily penalty if the settlement goes past 45 days.  Your paperwork has just begun!  HUD's form 9548 must be filled out exactly according to instructions, in addition to up to 17 required addenda.

I would be happy to consult with any buyer or investor who is interested in HUD homes.  Just call me at 717-951-5552 or email brian@cbselectpros.com .