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Tom Winand's Blog

By Tom Winand | Broker in 84105

Buying HUD Homes with only $100 Down

Yes you can buy a HUD home with only $100 Down


  $100 Down payment program from HUD homes

If your looking for the best deal to buy a home let’s look at HUD homes.  HUD has a program that would allow you to buy a HUD home with only $100 down.  You would still need to put up the HUD required earnest money for offers $50,000 or less the earnest money (deposit) is $500. If offer is $50,001 or more the earnest money is $1,000.  That will be refunded at closing if your offer and FHA loan is structured properly by your lender.  This program allow for HUD to pay up to 3% to your closing costs which should be enough to cover all of them.  So what you get is a FHA mortgage with only a $100 down payment.  All other FHA purchase loans are 3% down but if you’re buying a HUD home its $100 for a limited time.  That is a very good deal for home buyers.

What is a HUD Home?

To give you some back ground on what a HUD home is it's a foreclosed on home that had a FHA-insured mortgage.  HUD pays off the losses of the bank and takes the home to sell to recoup their losses.  It is then offered for sale at market value, based on a recent AS-IS appraisal, meaning, and the market value in its current condition.

How are HUD Homes sold?

HUD homes are listed for sale by management companies under contract to HUD. They are sold through a sealed bid auction, and any real estate broker registered with HUD may submit an offer and contract to purchase on your behalf.

Who can buy a HUD Home?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

 

What is the process of buying a HUD home?

Buying a HUD home is a lot different than the traditional method of making an offer on a home and getting an answer back the next day. HUD homes are sold by sealed bid auction, and our team will assist you with each step.

  1. Since this is an auction, you will be bidding on the home. The first step is to get you qualified as a bidder.
  • You must have a letter of loan qualification from your lender.
  • Some mortgage professionals know the special programs available to purchase HUD homes. Like the $100 Down payment program.  You need an experienced mortgage professional in financing HUD homes avoid unwanted surprises!
  • You need earnest money.
    • For homes UNDER $50,000, the earnest money is $500.
    • For homes OVER $50,000, the earnest money is $1,000.

·  These must be in the form of a cashier's check or money order, made out to the Department of Housing and Urban Development

·  There may be more requirements for certain areas - your GoHUD.com agent will let you know what they are.

·  Determining what to bid.

  • This is where all the training and experience of your agents is invaluable!
  • You want to win the home but not bid too much or too little. HUD sets minimum acceptable net bids, so bidding too little can make your bid unacceptable. This amount varies, and is not published - yet another reason to have an experienced agent!
  • What is the home worth in average condition?
  • What will it take to put the home back in average condition?
  • What have similar HUD homes sold for in the past?
  • You will be prepared to make a very competent bid!
  • A winning bid is the highest net bid, or the bid that pays HUD the most. For example, if you ask HUD to pay your closing costs that reduces the net.
  • Many aspects go into the net bid amount. You need an agent that will be able to balance your needs to put together the best bid on your HUD home.

·  Your HUD Realtor places the bid on your behalf over an electronic bidding website.

 

·  Every home has a Bid Closing Date. Your agent can see if you won the bid the next day

 

·  HUD does have minimum bid requirements on each home. In the past that has been approximately 83% net bed to HUDIf no bids meet their criteria during the initial bidding phase, bids will be opened to non-owner occupied bids, and other levels

 

·  If you are the one with the winning bid, your agent will have all the details you need regarding closing on your new home. Most of the details are standard, and can be discussed in one of your early conversations.

 Are there any special programs?

$100 down payment program. Properties in designated areas are available at a reduced sales price to police officers, teachers, firefighters, emergency medical technicians, nonprofits and local governments. Your agent will be able to provide you with specifics.

How do I find a HUD home?

The best source for finding a HUD home is on www.GoHUD.com you can register FREE and you will be able to map the homes and see property inspection reports of the homes. It’s a national search, with the advanced search you can search the nation for homes below a $ amount. They can also help you find a HUD approved Realtor and Lender.

 

Technorati Tags: Agents, government, Homes, HUD, HUD Homes, Investment, Mortgage, property, Real Estate

 

 
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