How to Buy A HUD Home in Northern California?

How to Buy A HUD Home in Northern California?

What is a HUD home? A HUD home is a 1-4 unit residential property that HUD has acquired as a result of a foreclosure on an FHA insured loan.  Right now there aren't too many homes on the market but the last few years many of the people buying homes have been obtaining FHA loans.  When these loans start defaulting you will see more inventories on the market.

How do I buy a HUD home? The first few days that a HUD property is on the market it is only open to owner occupied bids.  Investors will have to wait for open bidding to submit their offer.  All bids are submitted electronically online.  If your bid is accepted your real estate agent will be notified and you will have only 48 hours (two business days) to get your full package turned in to the local HUD office.  Visit the PEMCO website to search for HUD homes on the market.

Can any real estate agent help me find a HUD home?  No.  Only agents whose brokers are registered with HUD have access to the HUD homes.  Any real estate agent at Executive Properties can help you find a HUD home!

NOTE:  It is also important to know that if you do buy a HUD home you will have to either bring a new lock or a locksmith to change the existing locks as your agent will not be able to hand over the physical key to you at close of escrow!   Find a HUD real estate broker in your city to help you.

Will HUD make repairs to the home?  No.  All homes are sold AS IS.  In each of the listings on the website you will see a link that says, "property condition report."  This is a home inspection that has been completed on the property.  This should be reviewed before you make an offer on the property so that you have a general idea of the condition of the property.  It is also important to know that you may also have to pay for utilities and water to be turned on at the property in order to complete your inspections.

How much will my earnest money deposit need to be?

• $500 when the purchase price is under $50,000
• $1000 when the purchase price is over $50,000
• 50% of the purchase price on vacant lots

NOTE:  There are several FHA lenders that have a program for owner occupied buyers that only require you to put down $100 on a HUD home instead of the required 3.5%!  You still have to put down the earnest money deposit but your down payment will only be $100, there rest of your deposit would go toward your closing costs.  And, if you make a full price offer, HUD will also give you $1000 at close of escrow!

There is also one other important program that you should be aware of and it is the "Good Neighbor Next Door" program.  This program allows law enforcement officer's, firefighters, EMT's, and teachers the opportunity to purchase homes in revitalization neighborhoods at half off the list price!

Visit the HUD website for more information on buying HUD homes.