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Arthur Miller, (505) 503-0520's Blog

By Art Miller | Agent in Albuquerque, NM

Buy HUD Homes in the Rio Rancho Area for the Best Price

It is a great time to buy a home in the Rio Rancho Area be it HUD, Fannie Mae, Freddie Mac, or any regular bank owned REO foreclosure. HUD homes are ran a little bit more different than the other foreclosures. It is important that as an investor or first time home buyer that you get ahead of the game. Here are a few steps that you must take before submitting an offer for a HUD home.

1. An earnest money check in the amount of $1,000 in the form of a cashier's check needs to be delivered to your HUD register broker; $500 if the purchase price is less than $50,000.

2. If paying cash you must provide a current proof of funds letter.

3. If financing a pre-approval letter must accompany the offer and the letter must include:
    • A. Must be on lender letterhead
    • B. Dated within 30 days of the bid date
    • C. Signed by loan officer
    • D. Must state credit has been reviewed and approved
    • E. Must state that a written application has been made
    • F. Must state loan amount/correct loan amount/proof of funds
    • G. Must include name of purchaser

    Now that we have are ducks in a row we need to think about the condition of the home we want to purchase. If the dwelling is not insurable (that means that the condition is not up to par for FHA or Conventional loans) cash financing or 203(k) Rehab loans are the most popular avenues for financing. These homes have fewer lookers and can be great investments if you are up to the extensive remodel. If you are looking for insurable homes HUD offers $100 down financing or you could use a subsidized loan option known as MFA which allows a few different borrower assistance programs (zero down and lower interest rates).

    There is the occasional "Good Neighbor Next Door Program" that allows our local heroes (teachers, police officers, firefighters) to select HUD homes for 50% off of list price. This program is ran on a lottery system.

    It should be noted that not every HUD deal is a great investment. I advise that you confide in an agent that is familiar in renovations and has some valuation experience. HUD homes are reduced in price every 30 days+/-. There are many more statistics that I have researched about HUD homes that help my clients get the upper hand with HUD homes and other REO properties. Work with me and I can put my statistical research to work for you so that you buy at the absolute lowest... this does mean that we might be overbid a time or two but that is ok because we will move on to the next deal that slips through the cracks so that we can optimize your investment.

    I have seen many HUD and other REO homes sell for up to and beyond 50% of cost to build and many homes can be mortgaged at or below rental costs. Contact me and we can organize our efforts to help you realize your real estate goals!

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