Foreclosures & HUD Homes
Bank Foreclosures
When a person with a non-FHA/VA loan gets foreclosed on, the property reverts back to the bank that is holding the lein.
These properties are typically listed on the open market and are available to all purchasers.
The Bank Board meets to review all offers and either accepts, counters, or rejects them. It can take up to two weeks to receive an answer from the board. During that time they will continue to collect offers as well.
All homes are sold As-Is, but there is an inspection period available.
Most properties are priced to sell, and appraisals are obtained by the bank prior to listing. Prices are negotiable.
HUD Homes
What is a HUD Home?
The United States Departmnet of Housing and Urban Development (HUD) oversees the Federal Housing Administration (FHA), which provides federal insurance against default on home mortgages. If the payments ar enot made on an insured FHA loan, the house becomes a HUD owned home.
Who Can Buy a HUD Home?
Any qualified purchaser can offer to buy a HUD home. Before making an offer, prospective buyers must have a letter, written on the stationery of a mortgage lender, stating that they have been pre-qualified. Buyers paying all cash must provide proof of available funds.
Who Can Sell a HUD Home?
Currently licensed HUD registered real estate brokers, and the agents associated with them, may show, advertise, and submit offers on HUD owned properties.
Prior to listing for the general market, single-family houses that are located in Revite Areas are offered to eligible full-time law enforcement officers and to full-time eligible certified K-12 schoolteachers and administrators. The Officer/Teacher Next Door (OND/TND) program allows these buyers to receive up to a 50% discount.
Financing the Purchase of a HUD Home
The FHA is usually the best source for financing. Depending upon the condition of hte house, an FHA 203(b) or and FHA 203(k) loan may be used. Of course, any HUD property may also be purchased for all cash, or with conventional or other financing, subject to the lender's requirements for that type of loan.
HUD Sales Procedures and Requirements
All HUD homes are sold strictly "AS-IS." HUD does not make any repairs. Purchasers must make sure the home is in the condition they are willing to accept.
Prospective buyers must be pre-qualified.
The required earnest money deposit that hte selling broker must have secured from the purchaser prior to bidding on their behalf is either $500 (for $50,000 or less sales price) or $1,000 (for $50,001 or more sales price).
All HUD homes are sold by electronic bid.