I'll Take HUD Homes For $200, Alex

By
Real Estate Agent with Evergreen Realty & Associates, Inc. BRE #01466683
https://activerain.com/droplet/xml

What is a HUD Home?  I can hear your thoughts already: 'DUH ... It's a home owned by HUD!'  True enough, but are you confident you know enough about them to make it a daily double?

Yes, HUD Homes are owned by HUD, but who is HUD anyway? And what characteristics make a home eligible to be a HUD Home?


First Things First

Flow Chart: Journey of A HUD HomeHUD is an acronym for the United States Department of Housing & Urban Development.  It is a critical federal agency whose leader (The HUD Secretary) is a cabinet-level appointment that reports to the President of the United States.

Have you ever heard of an FHA loan? Well, FHA stands for Federal Housing Administration, and it is a department within HUD whose Commissioner reports to the HUD Secretary.

FHA promotes homeownership in a number of ways, including providing loan guarantees to private lenders for making low downpayment FHA loans to homebuyers.

Cliff's Notes Version

Before your head starts spinning with all the alphabet soup and Realtor®-ese, here's the basic English version:

  • HUD wants Americans to be able to purhase homes
  • FHA sets guidelines for what qualifications a buyer must have
  • Banks qualify homebuyers based on this criteria and give mortgage loans to homebuyers
  • FHA insures these mortgages, promising to pay back the lender if the homeowner ends up in foreclosure
  • Banks then see the FHA guaranteed loans as a low-risk and make loans directly to homeowners

When those homeowners cannot pay their mortgage, the bank forecloses and then cashes in on the FHA insurance guarantee and gives the house back to HUD.

So, when you are buying a HUD Home, you are buying a foreclosure directly from the federal government, and it is ALWAYS SOLD AS IS.

 

For A Quick Recap ...

Jeopardy Game Show Image

If you were on Jeopardy!, here's what Alex Trebek would say, 'This special type of American real estate has the following characteristics:

              • A one to four unit property
              • With FHA insurance on the mortgage loan
              • Which is foreclosed on by the original lender
              • Who then files an FHA insurance claim
              • And signs over title to the largest U.S. Housing Agency

 

And then you would push your buzzer (first, of course!) and give the only acceptable answer: "What is A HUD Home?"

 

Stay tuned for our upcoming post on Common Myths and Misconceptions About HUD Homes.  Better yet ... SUBSCRIBE!

If you are looking for information on how to buy a HUD Home, you've just found your one-stop resource.  If you are interested in buying a HUD Home in Southern California, we can help you directly.

If you are interested in buying a HUD Home nationwide, we can refer you to HUD-Registered brokers and agents who are trained on the most recent HUD procedures and actively selling HUD Homes in today's market.


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ACG Founder AngieABOUT THE AUTHOR

A lover of music, travel, languages, cultures and people, ANGIE NWANODI is the Founder and Principal of The ACG Group, Realtors®, an agent team practicing under Evergreen Realty & Associates, Inc.  Angie started in the real estate industry in 2000 as a Policy Analyst for a national nonprofit housing developer, eventually becoming its Director of Policy and having the honor of testifying before Congress on the preservation of affordable housing during her tenure.  Angie went on to start her own residential real estate practice in November, 2005.

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THE ACG GROUP, REALTORS® are distressed property experts with specialization in HUD, REO and Short Sales. As one of 54 California Local Listing Brokers for the U.S. Department of Housing and Urban Development (HUD) through PEMCO, Ltd., we offer training and community events for real estate brokers and agents, homebuyers and investors interested in mastering the process of buying a HUD Home.

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Re-Blogged 24 times:

Re-Blogged By Re-Blogged At
  1. Graziella Bruner 03/15/2012 05:27 AM
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  5. Doug Patterson 03/15/2012 11:44 PM
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  7. Terry McCarley 03/16/2012 12:00 AM
  8. Anna Banana Kruchten - Phoenix Homes Sales 03/16/2012 12:22 AM
  9. Karen Crowson 03/16/2012 12:30 AM
  10. Andretta Robinson 03/16/2012 12:34 AM
  11. Waynette Hoover Araj 03/16/2012 01:08 AM
  12. Jamie R. Bell 03/16/2012 01:54 AM
  13. Shannon Runyan 03/16/2012 01:59 AM
  14. Gene Riemenschneider 03/16/2012 02:25 AM
  15. Debbe Perry 03/16/2012 10:04 AM
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  18. Brenda, Ron, Lee Cunningham & Tara Keator 03/17/2012 09:55 AM
  19. Gabe Sanders 03/18/2012 08:26 PM
  20. John Kavaller 03/20/2012 08:11 AM
  21. Cheryl Ritchie 03/23/2012 08:15 PM
  22. Maureen McCabe 03/26/2012 10:31 AM
  23. Carla Harbert 03/30/2012 02:03 PM
  24. Bob & Leilani Souza 04/01/2012 12:33 PM
Topic:
Home Buying
Groups:
REO
Building Your Niche
HUD Homes Mastery
Tags:
fha
hud homes
tutorial
foreclosure
hud
hud pemco
pemco

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Rainer
39,175
Marc St Martin
United Real Estate Infinity - Cape Coral, FL
Your friend in the business!

Great post!  Excellent, simple explanation of a question posed almost daily.  Thanks!

Mar 17, 2012 09:05 AM #96
Rainer
295,383
Paddy Deighan JD PhD
TimeshareLawyers.pro - Vail, CO
Paddy Deighan J.D. Ph.D

Well done...great, catchy title and a wonderful HUD explanation/graph

Mar 17, 2012 04:54 PM #97
Rainmaker
642,556
Dawn A Fabiszak
Private Label Realty ( Denver metro area, Colorado - Aurora, CO
The Dawn of a New Real Estate Experience!

Angie ~ what a great post that any newbie home buyer can understand.  You certainly deserved the feature.

Mar 18, 2012 01:54 PM #98
Rainer
38,792
Angie Nwanodi
Evergreen Realty & Associates, Inc. - Rancho Cucamonga, CA
The ACG Group, Realtors®|Standard, Short, HUD, REO

Alan~ Thanks for reading, and for the compliment.  I did not intend the 'hook' of my post to be offensive ... I'm sorry you felt it was offensive.

I suspect we may agree to disagree on the ideological issue of the role of the federal government in general or HUD as a federal agency.  The agency does many things, including enforce fair housing laws.  As someone who has experienced, and whose parents experienced discrimination in housing back in the 70s, I appreciate the role that the federal government plays in ensuring fairness for all citizens in the basic issue of access to housing despite the remaining personal prejudices of some citizens.  Imagine struggling through school, obtaining advanced degrees, being married with a small child and being refused housing everywhere you apply despite being eminently qualified. In 2012, I have had people openly ask me what the race of an applicant or buyer is, or what race is predominant in a neighborhood.

State's rights are an important part of our governing philosophy, and one of my favorite reads is The Federalist Papers, where the case for the federal government and its scope were openly debated by some of our founders.  I believe in a federal role precisely because states have historically claimed and demanded the right to do things in the name of 'majority rule' that frankly we have come to abhor as a society ... with the help of federal standards saying, 'there are some basic groundrules, guys.'  Without a central government, albeit a limited one, we are not 'one nation' at all.

 

Mar 20, 2012 02:28 AM #99
Rainer
38,792
Angie Nwanodi
Evergreen Realty & Associates, Inc. - Rancho Cucamonga, CA
The ACG Group, Realtors®|Standard, Short, HUD, REO

Steve ~ Thanks.  Yes, they are different than REOs and in some ways more challenging.  There are, however some offsets that iin my view make the diferrences worth learning and working through.

Debbie, Marc, Paddy and Dawn ~ Thank you each so much!

Mar 20, 2012 02:33 AM #100
Rainer
227,067
Ed Vogt
Midwest Properties of Michigan - Grandville, MI
Grandville, MI Midwest Properties

Nice post and good explanation.  I'm bookmarking this.  Just attended a class yesterday regarding HUD homes, learned a few new things since I last sold one.

Mar 22, 2012 12:56 AM #101
Rainer
38,792
Angie Nwanodi
Evergreen Realty & Associates, Inc. - Rancho Cucamonga, CA
The ACG Group, Realtors®|Standard, Short, HUD, REO

Ed ~ Glad it was a helpful reinforcer for you.  Best possible wishes on adding HUD transactions to your business this yer!

Mar 22, 2012 06:12 AM #102
Rainmaker
1,478,261
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

In my email this morning.... a weekly email from LinkedIn....

"The week's top news, tailored for you"

real estate articles from

inc.com
money.cnn.com
money.cnn.com
online.wsj.com
activerain.com

ActiveRain?   because I am a member?  No... because like the other 4 articles, from prestigious publications, the post is trending with Microsoft and IBM (read that LARGE companies, many employees... it is probably trending with others too, this is just the way this alert does it... 2 companies.)    Congratulation Angie. I'd read the post...  

 

 
Mar 22, 2012 10:07 PM #103
Rainmaker
216,817
Denise Watkins
Tristar Realty, INC - Upper Marlboro, MD
Realtor Serving DC and MD

I really enjoyed reading your blog.  Your enthusiasm came through so overwhelming that it made me subscribe to your blog.  Looking forward to reading future posts. 

Mar 23, 2012 04:00 AM #104
Rainmaker
188,516
Joye Hollis Ridgeway
AgentOwned Realty, Charleston SC - Charleston, SC
- Homes, Land, Investment, Commercial

Entertaining analogy and colorful graphics makes for inviting post !!  Understandable explanation of the HUD process.  I have closed a couple of HUD's and it's a different experience for sure.  I'd it's a new idea to most buyers.  Congratulations on the post.

Mar 23, 2012 09:06 AM #105
Rainmaker
1,365,969
Cheryl Ritchie
RE/MAX Leading Edge www.GoldenResults.com - Huntingtown, MD
Southern Maryland 301-980-7566
I saw Maureen's featured AR post that lead us all over! Reblogging in two seconds flat!
Mar 23, 2012 08:12 PM #106
Rainer
38,792
Angie Nwanodi
Evergreen Realty & Associates, Inc. - Rancho Cucamonga, CA
The ACG Group, Realtors®|Standard, Short, HUD, REO

Maureen ~ Thanks again for notifying me of the LinkedIn pick-up of this post.  The concept of viral is finally sinking in : )

Denise ~ Thanks so much!  I hope you enjoy the blog.

Joye ~ Thanks, and congrats on taking on HUDs.  I find that the more you do them and explain their benefits to buyers, the easier they become.  Keep at it!

 

Mar 24, 2012 10:28 AM #107
Ambassador
517,958
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTOR® - Charlottesville Virginia Homes / Horse

Good post in a very consise easy to understand format.  We are just beginnig to see Hud homes in my area.  They appear to be priced lower than other foreclosures.

Mar 24, 2012 11:26 PM #108
Rainmaker
1,037,119
Mark Loewenberg
KW of the Palm Beaches - Palm Beach Gardens, FL
KW 561-214-0370

great graphic to show off to educate sellers and buyers!

Mar 26, 2012 10:56 AM #109
Ambassador
4,300,642
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Angie, simple and informative article about HUD - that at least clarify many things for me as I work with a buyer for the purchase of a HUD home, first experience for me - and yes, you made it simple and easily understandable. I did use the terminology - HUD is nothing but a foreclosurer from the Governement!

Mar 30, 2012 02:09 PM #110
Rainmaker
1,317,551
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Angie -- very well done.  I learned some new things about HUD homes.  Looks like we have several opinions here in the rain.  Job well done.

Apr 01, 2012 12:28 PM #111
Rainmaker
63,769
Michelle M. Arnold
Keller Williams Realty Yuma - Yuma, AZ
Associate Broker

Great Post!  I love selling HUD homes!  And the process that has been created for us to sell a HUD home is certainly streamlined over so many other options out there.  Thank you!

Apr 13, 2012 02:34 PM #112
Rainer
135,682
Matt Robinson
Professional Investors Guild - Pensacola, FL
www.professionalinvestorsguild.com

Great info for consumers, Angie.  I'm sure you'll probably get a lot of traffic from this post.  The first few homes I sold in real estate were all HUD homes, because I advertised them in my local paper.  At that time, I was an expert in the process, but it's probably been 7-8 years since I've sold one.  In my area they are mostly in the low end, so I usually don't run across them all that often anymore. 

Jan 29, 2013 01:28 AM #113
Rainmaker
1,496,087
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

lol,

this is very funny,

ahhhaha!: 'DUH ... It's a home owned by HUD!'

Feb 02, 2013 06:30 PM #114
Anonymous
kailee

Hello angie my name is kailee and i need help buying a HUD home. Is there anyway u can help me?

Apr 01, 2015 07:26 PM #115
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The ACG Group, Realtors®|Standard, Short, HUD, REO
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