What are HUD Homes? Are They Good Deals?

HUD Homes

Many first time home buyers and those a like, have started exploring the real estate market and have come across "HUD Homes".  Many have no idea what HUD stands for let alone what that even means about the home.  HUD stands for Housing and Urban Development.  They are a department of the United States government and they work to provide affordable urban housing and promote homeownership.  HUD homes are 1-4 units and are acquired as a result of foreclosure on a FHA backed loan.

HUD has teamed with the Federal Housing Administration to provide insured mortgages and lower down payments to become a homeowner.  When someone can not make the payments on a HUD insured loan, the bank has to repossess the home and HUD pays the lender the amount owed.  Therefore banks feel much more comfortable lending to people who otherwise may not have been approved with the HUD insurance.  HUD then sells the property as quickly as possible at market value, which is why many times you can find great deals on HUD homes because, as a buyer you are aware they are in a rush to get rid of it.  

Almost anyone can purchase a HUD home (subject to financing) and as long as the purchase is for owner occupants.  If homes are still unsold, investors are able to come in later to purchase a HUD home, and usually at discounted prices.  FHA loans are acceptable on HUD homes, however you can not go through HUD to receive financing.  That must be done through a registered lender.  

If you have any more questions regarding HUD homes, if they are good deals, please feel free to email me, visit my website, or give me a call on my personal cell phone.  Have a wonderful day!!!