Best HUD Homes Guide
HUD homes offer home buyers and renters several benefits. For homebuyers, these homes are generally less expensive compared to traditional homes and career-related discounts can reduce the price of a home by up to 50 percent.For renters, these homes offer affordable rental options when owned by state programs or private landlords. Some HUD homes even become future rentals for the HUD Public Housing program.
It is, therefore, worth taking the time to learn more about HUD homes, especially if you are interested in purchasing the home of your dreams.
What Are HUD Homes?
HUD homes are homes that are acquired by the HUD after a foreclosure on a house that had a FHA-insured mortgage. After the HUD becomes the new owner of the property, the HUD attempts to sell the home to recoup the loss the department experiences in the foreclosure claim.In some cases, HUD foreclosed homes are purchased by state and local organizations in an effort to provide affordable housing to low-income residents. To rent one of these rental properties, you must qualify for its associated program.
The Average Cost of Buying a HUD Home
HUD homes for sale are commonly more affordable than traditional properties. Homes are sold “as is,” but many are still in pristine condition. These homes are generally sold below market value in an attempt to recoup money lost in the foreclosure claim quickly.The exact cost of a home will vary by the home itself and the area that you live within. Houses are priced competitively to initiate a quick sale. Additionally, the Good Neighbor Next Door program provides qualifying applicants with up to 50 percent off the price of a home.
This program is available to homebuyers who hold certain occupations, including teachers, firefighters, EMTs and law enforcement officials. Only certain homes are eligible for the Good Neighbor Next Door program as a property must be located within a revitalization area.
When purchasing a HUD home, it is essential that you have an inspection completely by a licensed inspector. While not required, having an inspection completed will inform you about any additional damages to the property or repair costs that you will likely need to pay. As stated previously, these homes are sold “as is” and you will not receive any type of guarantee or warranty period.
How to Find HUD Homes for Sale
HUD homes for sale can be found online or through realtors who are authorized to close on HUD properties. When utilizing the online home store, you will find several filters that can help you narrow down your search for a home.This includes filters regarding home size, location, features, price, and whether or not the Good Neighbor Next Door discount may be applied to the purchase of the property.
Once you know the HUD foreclosed home that you wish to purchase, you must be able to provide financing for the home. This can be done with the money you have on hand or through a loan or mortgage. The HUD does not provide financial assistance to prospective home buyers directly.
However, you may qualify for a mortgage through an FHA loan or another government-backed loan program.
Government backed programs such as FHA, USDA, and VA loans are often far easier to qualify for compared to traditional loans. These loan programs also offer buyers a great deal of incentive and can help reduce the total amount of money that a buyer can be expected to pay over the life of the loan.
If you have a real estate agent, that agent must be authorized to work on HUD properties. Your agent can submit an offer for you on a HUD property once you are committed to buy.
How to Find HUD Homes for Rent
HUD homes for rent offer low-income households the opportunity to find safe and affordable housing. HUD properties that are available for rent are usually state-owned properties. However, they may be privately owned if an individual purchased the home and then made it available for Section 8 housing.You can learn more about these rentals by contacting your local public housing agency. Generally, you will need to qualify for housing assistance through either the Section 8 program or the public housing program.
Before submitting an application for either program, however, it is important to learn more about these programs. By taking the time to do so, you will know whether or not you may apply for benefits before going through the trouble of submitting an application.
