What is a HUD Loan and how does it work?

Arizona HUD Loans

A number of would be homeowners may have heard something about Arizona HUD Home loans but are not quite sure exactly what they are, or how they might differ from other private mortgage loans. These are just a few of the basic facts about HUD loans, and why they might be the right home loan for you.

What exactly is an HUD Loan?

The FHA – The Federal Housing Administration – was created as a part of a piece of legislation called the National Housing Act of 1934.

The purpose of the creation of the FHA was to help provide more Americans with the chance to own their home by insuring loans that offered lower down-payment options and reasonable monthly mortgage rates.

Essentially the intent behind an FHA loan has changed very little over the years and it is the FHA that now insures the HUD loan products.

By insuring the loan against loss to the lender should a buyer default the FHA offers a guarantee to private lenders on a Arizona HUD Home loans that make them far more willing to make mortgage loans that come with a lower down payment attached and to those a private mortgage banker might consider too high of a risk to grant a mortgage loan to.

Who Can Get an HUD Loan?

The Department of Housing and Urban Development (HUD) strives hard to promote home ownership for families in all income brackets. As a part of its main mission thoughFHA insured, HUD loans are designed for families with poor credit or who have faced previous financial struggles.

There are several different types of FHA insured HUD loans available. The best person to discuss a specific FHA loan type based suited to a home buyers individual needs anFHA/HUD  mortgage specialist, who has the knowledge and experience with all of the loan offerings available.

What are The Advantages of an Arizona HUD Home loan?

Perhaps the most obvious advantage of an FHA insured HUD loan is the fact that a home buyer needs only to find a down payment of approximately 3.5% of the purchase price of the home instead of the more usual 6% required when taking out a private mortgage. But there are other advantages as well. These include:

The option of more easily using financial gifts towards a down payment. This can be a big plus for young, first time buyers or families with relatives willing to help them.

• There is no prepayment penalty, which can add up to big savings over time.
• Often lenders will show greater leniency if a borrower runs into temporal financial problems.

What the Basic HUD Loan Qualification Requirements?

The ability to come up with the required down payment is one. A demonstrable steady income is another must, although credit rating may be considered more favorably if it has been poor in the past by a HUD loan lender.

A HUD Home is what I am looking at how do I finance it?

A HUD home or a HUD repo is a property that has gone through the foreclosure process and that HUD is now holding as inventory and is wishing to sell the home to a new qualified homeowner. These homes have a specific purchasing process that even includes bidding on a property and that must be marketed for a specific price and time before being allowed to be bought by investors!  It is really a great way to revitalize struggling neighborhoods and communities, often representing quite the "deal" for buyers! For more on the purchasing process and special paperwork needed please contact my office below.

The Mark Taylor Team can help you get an Arizona HUD Loan!

Contact the Mark Taylor Team today to get started on your Arizona HUD Loan and a free list of HUD homes for sale in your area. Email or call with questions or for your free list 602-361-0707