There are many advantages to purchasing a HUD Home. My NUMBER ONE reason is FHA home buyers who plan on occupying the home are often outbid by investors on REO properties. With HUD Homes Priority bidding is given to owner occupants (homebuyers that intend to occupy the property within 30 days) for the first 30 days of the property being listed.
Purchasing a HUD Home in a Distressed Market. HUD Homes are Sold As-Is. And are not warranted. Before a HUD Home is listed, an inspection is completed and a Property Condition Report is given on the property. I would recommend home buyers bring a Professional Home Inspector upon viewing the HUD Home so you aware of any red flags before submitting a bid on the property. HUD Homes are typically considered “fixer-uppers,” however not all HUD Homes are in need of repairs. Lets remember…that HUD homes are an attractive purchase because of their affordable price, which allows home buyers to save money that they can use to make the necessary repairs needed. Word of advice: Home buyers should make sure they are comfortable with the repairs needed on the house before submitting a bid and sending in their earnest money deposit. HUD has very strict guidelines on reasons for cancellation, which could have an impact on the home buyer having their EMD refunded. Another reason to use an experienced Central Valley HUD Home Selling Agent.
Lets Talk Insurance! HUD has their own vocabulary and some codes that home buyers should be aware of are the insurance codes and what they mean to the sale of a HUD Home.
- IE = Insurable with repair escrow. This property require repairs estimated to cost no more than $5,000; it is eligible for an FHA-
Insured loan provided the purchaser’s lender sets up a repair escrow at closing. - IN = Insurable. This property is eligible for an FHA-insured loan in its current condition.
- UI = Uninsured. This property requires repairs estimated to cost more than $5,000; It is not eligible for an FHA-Insured loan, unless a 203(K) Financing loan can be arranged.
(Source: Glossory of HUD Homes Listing Codes)
Utilizing FHA Financing to Purchase HUD Homes. It’s important to remember that HUD Homes are sold as-is; A 203(K) Financing loan can be that gateway for a home buyer to make repairs or renovations to the HUD home without it physically coming out of their pockets and before they move into the HUD Home.
Current Market: In the Central Valley HUD Homes are currently selling like HOTCAKES! HUD Homes are not staying on the market for long, so it would be wise for home buyers to work with an experienced Central Valley HUD Home Selling Agent to get your offer submitted quickly and accurately.
The Mother & Daughter Realty Team are experienced Central Valley HUD Home Selling Agents. Visit our showcase of HUD Homes on Facebook at www.facebook.com/HUDHomesShowcase. To received a FREE list of HUD Homes for Sale in San Joaquin County and Stanislaus County visit our website and sign-up.
The home shown is currently avalable in Patterson, CA. Courtesy of Metrolist.
Comments(0)