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What is a HUD Home?
A HUD Home is a property with an FHA insured mortgage that has gone into default. The lender acquires the property through foreclosure then submits an FHA insurance claim. The property is then conveys ownership to the U.S. Department of Housing and Urban Development (HUD). HUD will then sell the home through their Asset Manager (AM), BLB Resources. It will then be listed for sale with the LLB Local Listing Broker, for Cochise county that is The McNab Team. A HUD Home can be a single family residence (SFR), townhouse, condominium, mobile home or multiple family attached home up to 4 units.
Who can buy a HUD Home?
Almost anyone! If you have the cash or can qualify for a mortgage, subject to certain restrictions, you may buy a HUD home. HUD employees and relatives of HUD employees are eligible, but must receive written approval from the Director of HUD's Office of Single Family Asset Management in order to purchase a HUD-owned single family property. HUD employees should refer to paragraph 10-29C of Handbook 4310.5, REV-2, Property Disposition Handbook-One to Four Family Properties for the exact requirements to purchase a HUD-owned single family property. Other less common restrictions may apply.
Buying a HUD Home
If you're considering buying a foreclosed or HUD home, talk to your real estate agent. He will be able to assist you in finding a home that fits all your needs. HUD homes like other foreclosures, come onto the market quickly and may be snapped up just as fast. The key to buying these types of homes is to be on the lookout for them. It is helpful to pre-qualify for a loan so that you are ready in case a good property comes up for sale. If you think you may qualify for an FHA loan, talk to your agent.
When buying any type of property, it is essential to make sure that you know as much about it as possible before making an offer. Contact the McNabs for a free buyers booklet and a free HUD home list
How do I buy a HUD Home?
Start by finding a real estate agent that is registered to sell HUD homes... one that knows HUD Homes inside and out like The McNab Team. Your real estate agent must submit your bid for you. Normally, HUD Homes are sold in an "Offer Period." At the end of the Offer Period, all offers are opened and, the highest reasonable bid is accepted. If the home isn't sold in the initial Offer Period, registered agents can submit bids daily until the home is sold. Bids can be submitted any day of the week, including weekends and holidays. They will be opened the next business day.
What happens after my bid is accepted?
Your real estate agent will help you through the paperwork process. Once your bid is accepted you have 48 hours to get the contract package to HUD. This package must be sent overnight with original signatures. Make sure you and your agent is ready and knows how to complete the package so you are not late because your offer will be canceled. You'll be given a settlement date, 45 or 60 days depending on the financing you choose, by which you need to arrange financing and close the sale, or forfeit your earnest money deposit, or pay for an extension of your sales contract.
Inspections and repairs
You have a 15 day inspection period in which you can have the utilities turned on. You and your agent need to coordinate with the Field Service Manager to get the utilities on and off. The cost of the utilities will be at your expense. There are no repairs done to HUD Homes. You will not be given an opportunity to ask for repairs you discover in your inspection report. If you lender is requiring repairs in order to complete your loan they will have to be done after closing with an escrow holdback.
BLB Resources website is a great source of information for buying HUD Homes. www.blbresources.com
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