Whether you are in looking to invest in real estate or excited about purchasing your first home, HUD homes may be the most rewarding investment you can find in the real estate market today. HUD homes are attractive for many reasons; the most obvious is the value of the home you obtain for the little money required compared to other transactions.

What is a "HUD Home"?
The Federal Housing Administration (FHA) is a department of HUD that insures certain mortgage loans for lenders. If the lender forecloses on the loan, FHA repays the balance of the loan to the lender and the title to the home reverts to HUD. HUD then sells these homes at market value.

Anyone can buy a HUD home
HUD homes can be purchased by anyone. While many homes are affordable, this is not a low-income program. Home may be bought by owner-occupants (who have a priority bid period for 10 days), and by investors, who can then bid along with owner occupants.

HUD homes are sold at market value
HUD homes are initially priced for sale at the appraised market value. The buyer may offer any price, but HUD will only agree to offers that provide an acceptable return. Price reductions may take place later if the home does not sell.

Offers must be made electronically through a HUD registered broker
If you want to make an offer on a HUD home, you must bid through a HUD-registered broker.

Closing on a HUD home

Closings are generally within 45-60 days and held at the closing agent office
After your contract has been received correctly, it will be signed by First Preston on behalf of HUD and returned to your agent along with a contract acceptance letter. The letter will give you up to 60 days to close. Once you are ready to close, you and your agent must schedule the date with the closing agent indicated on the letter, who also receives a copy of your contract. First Preston does not set the closing date; it is up to you.

If you use the HUD closing agent, HUD pays their fees. You may use your own agent, but then you must pay the fees. If you use your own closing agent, they must work with the HUD agent on some legal items.

HUD will pay some closing and sales commission costs
Generally, HUD will pay up to 5% of your broker commission cost, plus up to 1% for the mandatory BLB commission. In addition, HUD will pay up to 5% for standard closing cost items (excluding the closing agent fee which is paid for separately). These items are designated by the buyer and may include discount points, loan fees, title costs, surveys, and other items. HUD will also generally pay any outstanding seller costs such as outstanding tax or utility bills which relate to HUD's ownership.

Please call today to find out more on HUD Homes in your area!

281-880-STAR (7827)

info@fivestar-realtors.com