MISSISSIPPI HUD HOMES FAQ

By
Real Estate Agent with Bob Leigh & Assoc., LLC

Mississippi HUD Homes FAQ
by Pam Simpson, Broker-Assoc.
The Kudzu Vine

Equal Housing Opportunity LogoI advertise a lot of HUD homes in my area of Northwest Mississippi (Desoto County, Tate County, Panola County, Marshall County) and I maintain a HUD/VA/Bank Foreclosure list every week.  Here are some of the Frequently Asked Questions I receive from prospective buyers (and other real estate agents).

1.  What is a HUD home?

A HUD home is a residential property acquired by HUD (Dept. of Housing and Urban Development) due to a past foreclosure action when the home had an FHA mortgage. 

2.  How can I find HUD homes for sale in my area?

The easiest way is to contact any HUD approved real estate broker.  You can also visit the website of Hooks van Holm (the management company for Mississippi HUDs).  If you are looking for a HUD home in Northwest Mississippi, you can sign up to receive my HUD Home/Foreclosure List

3.  How does the 'bid' process work?

For the first 10 days that a HUD home is on the market, it is only open to owner-occupant bids.  All bids received during this period are considered to have come in at the same time.  Generally, HUD will accept the bid with the highest net to them.  Highest net is purchase price minus concessions and commission.  If they receive no acceptable bids during the first 10 days, they will open the bidding to investors as well as owner-occupants and the bids are opened daily.

4.  What do I need in order to place a bid?

Only a HUD registered broker can place a bid for you.  You will need 2 out of the following:  Drivers license, Social Security Card, Passport.  You will also need an Earnest Money Deposit in Certified Funds (no personal checks).  The amount of the deposit depends on the price of the home.  For homes up to $50,000, the deposit is $500.  For homes $50,000 and above, the deposit is $1,000.  This deposit is applied to the purchase.  If you need a loan to purchase the home, you also need a pre-approval letter from a Direct Endosement Lender.  I find it helpful if the lender has in-house underwriting.  If you are paying cash, you will need a letter from your bank stating that you do have the funds to complete the purchase.

5.  Does HUD loan the money?

No.  You will need to get a mortgage loan just like you would do to purchase any other type of home.

6.  Are HUD Homes subsidized housing?

No.  There seems to be a misunderstanding that HUD homes and Section 8 housing are the same.  They are not.  HUD homes are not subsidized housing.  Generally, HUD homes are not for rent or lease.

7.  Are there any special programs to purchase a HUD home?

Yes.  In Mississippi, HUD is currently offering a special $100 down payment program for owner-occupants who purchase a HUD home using an FHA loan.  This is a tremendous program because HUD will also contribute up to 3% of the purchase price to assist buyer's closing costs.  Also see $100 Down.  Although not available in Northwest Mississippi, teachers, police and firefighters can purchase HUD homes at a significant discount in some communities.

8.  The home I like needs repairs, will HUD fix it?

All HUD homes are sold AS-IS (meaning HUD will not fix it).  However, there are special loans to address this issue.  They are called FHA 203K loans (rehab loans).  You borrow enough to purchase the house and make the necessary repairs.  This FHA loan is also eligible for the $100 downpayment incentive.

9.  I heard I can purchase a HUD Home for $1.

Only local governments can purchase qualified HUD homes for $1. 

I have helped both first-time homebuyers and investors find good HUD home deals.  Just like with any other home out there, not all HUD homes are great deals (or steals).  You need to know the active and sold comps of the surrounding community to make an informed buying decision.
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About the author:
Pam Simpson is an Assoc. Broker with Bob Leigh & Associates, LLC in Northwest MS.  Copyright©  2009 by Pam Simpson.  All rights reserved...***MISSISSIPPI HUD HOMES FAQ***

FOR BUYERS:  Buying a Foreclosure, Finding a Home, Loan Info, Tax Credit, Interest Rates

FOR SELLERS:  Pricing, Selling Tips   

LOCAL COMMUNITY INFO:  Tate County Community, Memphis Community, Southaven Community

MARKET REPORTS:  Foreclosure Report, Hernando MS Report, Olive Branch MS Report, Tate County MS Report

REALTOR STUFF:  NAR, Real Estate and Media, Real Estate Agents

OTHER:  Rural Life, Breast Cancer Awareness, Angel Food Ministries, Property Rights, Auctions

 Disclaimer:  All information provided by this author may be  based on information collected from several sources and is believed accurate but not guaranteed.

         

 

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Rainmaker
217,495
Mark Organek
And the United States of America - Mesa, AZ
On a journey to accomplish one huge goal.

Pam, great Q&A session for readers.  You provided much information that should answer some of the most common questions.

Aug 22, 2008 04:07 AM #1
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Mark - thanks for the comment.  You would be suprised at some of the questions I get about HUD homes.  I made it a point right after I obtained my license to learn as much as I could about HUDs because they are handled so differently from the other type of transactions. 

Aug 22, 2008 07:29 AM #2
Rainmaker
208,829
M. Suzi Woods (Gravenstuk)
NOW Sharing the life and spice of the GC one day at a time - Grand Canyon, AZ
Suzi Woods, Prior Independent REBroker in MS

 Great Job!

Aug 22, 2008 12:58 PM #3
Rainmaker
116,152
Pam Simpson
Bob Leigh & Assoc., LLC - Senatobia, MS
GRI, Broker-Assoc.

Suzi - thanks for the comment. 

Aug 24, 2008 02:49 AM #4
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Rainmaker
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Pam Simpson

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