The United States Department of Housing and Urban Development (HUD) acquires borrower defaulted Federal Housing Authority (FHA) home loans. Because the loans are guaranteed, HUD pays the lender and becomes the owner of the home. To recoup some of the loss, HUD sells the foreclosed homes, known as HUD homes. Additionally, local housing authorities rent and manage HUD's rental properties.
HUD Homes
To qualify as an HUD home, the structure must have 1 to 4 units or separate dwellings for housing. The structure can be an apartment complex, a single-family home, a duplex, triplex, or a quadraplex.
Purchasing an HUD Home
HUD homes vary depending upon the location, as the homes are sold based on the market value of similar homes in the area. The homes are usually affordable for buyers with income within the low to moderate range. Buyers, who plan to reside in the home, are given the option to purchase first. Unsold homes are then offered to realty companies and other investors. HUD may also offer special incentives for the sale of the home since it needs to recoup some of its losses.
HUD uses marketing and management companies to list properties and manage them. Persons interested in purchasing a nHUD home can bid during HUD's offering period or bidding period. At the end of the bidding period, the bidder with the highest bid can purchase the home. You can still have the option to make another bid if, during the process, the home does not sell.
HUD Home Inspections
HUD does not inspect their homes, so buyers will need to have a professional home inspector inspect the home prior to making a bid. The homes are sold "as is," so any repairs will be at the buyer's expense. Buyers can negotiate closing fees and financing. The FHA does have rehabilitation loans for buyers, who have purchased a HUD home.
Financing an HUD Home
HUD does not have a loan-financing program. HUD will accept cash or a verified loan. The FHA is available for financing or you can seek a loan from another financial institution.
Renting a HUD Home
HUD's public housing program allows low-income families or individuals the opportunity to rent a home or an apartment. The local housing authority manages the apartments and accepts applications. Criteria considered for eligibility includes income, disability status, immigration status, family status. References must be provided to ensure that the applicant's behavior or lifestyle will not be a negative factor for other tenants, as well as the property. Applicants must provide the names of all household members, verification of birth, previous landlords, current and previous employers, bank statements, if needed, to verify income. In addition, a home visit may be required. If you qualify to rent a HUD home, you will be placed on a waiting list.
Once a home is available, you must sign a lease agreement. The rent amount will depend on your income and expenses. Once eligible, tenants can rent as long as they remain eligible and adhere to the lease agreement. To learn more, contact a rental company like ABA Rental Properties Inc.
Share10 February 2016
When I started looking for a new house a few years ago, I realized that I had no idea what I really wanted. I knew that I wanted a place that had been updated recently, but apart from that, I was completely in the dark. After evaluating my budget and considering my options, I decided that it would be a good idea to go around with my real estate agent to help me to find a place. My agent was incredibly helpful, and I was able to narrow down my choices within a few hours. This blog is all about making the ever-important decision of becoming a homeowner.
