HUD Homes…

January 5th, 2011 by admin

Sold As Is… What this really means… You will often see this term associated with foreclosures and other distressed properties… In many cases this is simply the statement of the hope made by the Seller and is sometimes negotiable… But not with a HUD Home… HUD has gone into these homes and has gotten them to a level that they will pass FHA financing standards and their Sold As Is policy is firm. As a matter of fact, even their home inspection policy is more restrictive than normal. As a part of getting its properties ready for market, HUD has the property pre-inspected and provides a PCR (Property Condition Report) available to bidders. The prospective purchaser (bid winner) is encouraged to get a home inspection; however, unlike other inspection contingencies, the HUD Inspection policy disallows rejection of a property post bid award based on a condition documented in the PCR.

As with any other foreclosed property (but especially so with a HUD Property), repairs cannot be made prior to closing. Although, there may be pre-approved Repair Escrow funds available, be aware that repairs must be performed by an approved, qualified and licensed contractor to receive the escrow amount stated for the repairs by HUD. Other repairs may be financed via an FHA 203K loan. These are often used to replace missing utilities and to perform other desirable repairs after the closing. Again such repairs will have to be performed by an approved, qualified and licensed contractor.

There are a lot of ins and outs when dealing with buying a government foreclosure but the reward of an affordable home is well worth it. Before entering into a contract its best to arm yourself with as much info as possible about the foreclosure bidding process, getting inspections on foreclosures, HUD programs that offer additional savings and more here.

One of the exceptional opportunities afforded by HUD properties is the special incentive to certain purchasers through its Good Neighbor Next Door Program… Buying a home through HUD’s Good Neighbor Next Door initiative is designed to encourage renewal of revitalization areas by providing an opportunity for law enforcement officers, firefighters, emergency medical technicians and teachers to purchase homes in these communities. HUD provides a substantial incentive in the form of a 50% discount off the list price of eligible properties. More information on that program next week… Until then…

May the market be with you.