“Dreaming of Affordable Housing? See What’s Out There…”
In 1965, The U.S. Department of Housing and Urban Development (HUD) was established to increase the number of homeowners coupled with community development by deterring discrimination in regards to access to affordable housing. The program allows eligible families, who meet certain income requirements the opportunity to purchase housing.
A HUD home is a property taken into ownership by the Department of Urban and Housing Development after an FHA foreclosure, meaning that the Department took possession of the property following the person or people who took out the loan not making payments. FHA refers to the type of loan that is acquired by the person or people needing funds for the purchase of the property that meet the qualifying guidelines of the Federal Housing Administration.
Since the federal government insures these types of loans, the property falls into their ownership during a foreclosure. HUD then sells the property to recuperate the funds as a result of the losses on the loan.
For single-family properties, HousingList provides everyone the ability to search for available HUD homes for sale. You can also find great resources, such as buying tips. Different organizations and real estate brokers can bid on available properties for their clients.
What are the benefits of buying a HUD home?
The program allows families and individuals to save significant amounts of money. Eligible recipients can submit offers on homes without any money upfront. Also, many of these properties qualify for FHA loans, which require low down payments. These loans are written by private lenders but are insured by the FHA; in this aspect, HUD is not involved in the loan origination process.
HUD will also fund up to five percent of relevant closing costs on the property in addition to the ability to apply for a separate repair loan that can be incorporated into the original mortgage to restore the property to a safe and livable condition if necessary.
HUD homes are a great way for homebuyers to get not only a good deal on a home but also enough financial support to help curb the costly process that follows typical home purchases. With a little luck, timing, and support from a good lender and real estate broker, moving into a home for you and your family is much more attainable than you may have thought.
Who is Eligible?
Everyone who can qualify for a loan or has the funds necessary can purchase a HUD home. Priority is given primarily to people who will be living in the homes themselves; this is called owner occupancy. Unsold homes are then subsequently available to any willing and able buyer, including investors. This gives first time home buyers, individuals, and families the edge to find the home they have been looking for!