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REO Homes

September 4th, 2017 4:17 PM by Christel Silver

What is a HUD REO Home and how can I buy one?  

A HUD home is a one-to-four unit single - family residence acquired as a result of a foreclosure on an FHA-insured mortgage. 

An FHA loan is a mortgage insured by the Federal Housing Administration, a government agency within the U.S. Department of Housing and Urban Development. (HUD).  Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss, if the borrower defaults on the loan.  If the borrower foreclosures on the mortgage, the house goes back to HUD.

 

HUD has hired a management company to make sure the houses are in safe condition, an asset management contractor overseeing the listing and selling process (Sage Acquisition) and also selected Brokers, who are able to list and sell these homes.

These Brokers are specially trained and under strict supervision of HUD.

 

So, who can buy a HUD home? There are three groups of buyers:

  • Owner-Occupants
  • Investors
  • Gov. Agencies & HUD approved Non-Profit Organizations

 

In addition HUD offers special programs like the GNND: “Good Neighbor Next Door”

This program is for properties located in a designated revitalization area and offers discounts to Firefighters, EMT’s, Police, and Teachers.  If qualified, they receive a 50% off the list price with only $100 down payment.  There are some requirements: the buyer or spouse may not have owned title to a property in the last 12 months, nor can either of them have ever purchased a property with this program before.  They have to occupy the property for 36 months!  (To oversee the 36 month requirement HUD is securing a second trust for the 50% reduced sales price interest free, which will be released after the 36 months period).

 

If a property qualifies for either the GNND or for a Government Agencies, the properties are offered to these groups prior of becoming available on the open market for 6 days.

 

Where can you find more information about these programs:  www.hud.gov

Where can you find the homes? www.hudhomestore.com

 

Do you need an agent to buy a HUD home? YES!

The Broker of an office needs to be registered with HUD for him/her or his/her agents to help buyers purchase a HUD home.  The process is a bidding process via online electronic bidding, and the highest bidder will be awarded the contract.

 

As HUD is promoting Home Ownership home owners receive priority for a given time before investors can bid!

 

Many questions will remain: Can I have an inspection?  Can I select the closing agency?  Do I have to be pre-qualified?  All answers are YES!

If you have further questions, please contact me at 561-929-5799.

Posted in:Real Estate and tagged: HUD REO
Posted by Christel Silver on September 4th, 2017 4:17 PM