What is a "HUD Home"?
Answer: When someone with
a HUD insured mortgage can't meet the payments, the lender forecloses
on the home; HUD pays the lender what is owed; and HUD takes ownership
of the home. Then HUD sell it at market value as quickly as possible.
Question: Who can buy a HUD home?
Anyone! If you have the cash or can qualify for a mortgage, you
can buy a HUD home.
Question: Are HUD Homes meant for people with low incomes?
HUD homes range in price, but most are affordable for low- and
Question: Is it true I can get a HUD Home for a dollar?
No. HUD sells homes at market value - that means that the price
is set based on the price of similar homes sold in the area.
Question: If the HUD Home needs repairs, will HUD make them?
HUD Homes are sold "as-is," without warranty. That means that
HUD will not pay to correct any problems. But even if a HUD Home
needs fixing up - and not all of them do - it can be a real bargain!
For example, HUD's asking price on the home will reflect the fact
that the buyer will have to invest money to make improvements.
HUD might offer special incentives such as an allowance to upgrade
the property, a moving expense allowance, or a bonus for closing
the sale early. And keep in mind that on most sales, the buyer
can request HUD to pay all or a portion of the financing and closing
costs. Your real estate agent will have details.
you to get the home professionally inspected after your bid
has been acknowledged on the web site.
Question: How do I buy a HUD home?
by finding a HUD-certified real estate agent. Your real estate
agent must submit your bid for you, either by telephone or internet.
Homes are sold in an "Offer Period." At the end of the Offer Period,
all offers are opened and, basically, the highest bid is accepted.
If the home isn't sold in the initial Offer Period, you can submit
a bid any business day.
Question: If my bid is accepted, then what happens?
Your real estate agent will help you through the paperwork process.
You'll be given a settlement date, normally within 30-60 days,
where the transaction will occur. We have an excellent booklet
to help you understand the settlement process: "Buying
Your Home - Settlement Costs and Helpful Information."
When you buy
a HUD Home, the selling agent's commissions are usually paid
by HUD. HUD will pay a sales commission of 3%.
Question: How can I get a loan to buy a HUD Home?
make loans directly. But they do have a number of mortgage insurance
programs that could help you buy a home. You can read about those
programs here. Then contact a
HUD approved lender, who will take you through the steps and
actually make the loan.
Question: Can I buy a HUD Home as an investment?
Answer: Most HUD Homes
are initially offered on a priority basis to owner occupant purchasers
usually 30 days (people who are buying the home as their primary residence). Following
the priority period, unsold properties are then available to all
buyers, including investors.
Question: Is there anything else I should know about HUD Homes?
We encourage every homebuyer and homeowner to be a wise consumer,
so be sure to read HUD's
Consumer Information. Houses built before 1978 may have
lead based paint, which can cause harm to your family; so
be sure to read about this hazard and about what you would need
to do to correct it.
look at our
page, so that you will be familiar with what processes are involved
when purchasing a home in the Houston area either a new home,
resale or a government owned home.