In Mississippi, you can purchase a HUD home with only a $100 down payment.
First, here is a brief (and very simplified) introduction to HUD homes. When someone purchases a home using an FHA loan, the loan is insured by FHA (which is a part of HUD). If that borrower defaults on the FHA loan, HUD becomes the new owner by foreclosure. HUD does not wish to be a property owner, so they place these homes back on the market for sale.
In Mississippi, HUD and FHA have a program where you can purchase a HUD home using an FHA mortgage for only $100 down payment (instead of the ususal 3%). You have to qualify for the FHA loan, just like you would for any other (non-HUD owned) home.
This program is only available for owner-occupants and the earnest money requirements must still be met. This $100 down payment incentive not only applies to "FHA ready" homes but also to FHA repair loans.
UPDATE: This program could be discontinued at any time. It has already been discontinued in some states. Also, this program in no way changes the Earnest Money Deposit requirements. Currently, the deposit is $500 for homes under $50,000 and $1,000 for homes $50,000 and over.
About the author:
Pam Simpson is an Assoc. Broker with Bob Leigh & Associates, LLC in Northwest MS.
Disclaimer: All information provided by this author may be based on information collected from several sources and is believed accurate but not guaranteed.