Home Buying in Los Angeles>Question Details

Stephanie, Home Buyer in San Gabriel, CA

Any warning about a HUD home?

Asked by Stephanie, San Gabriel, CA Wed Dec 12, 2012

We are pre-approved with conventional loan. We saw a Hud home and this will be our first time buying a hud home. Any advice? Thank you.

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4
Sure ..you can get more advice at the web reference below regarding financing a HUD home.

Best of luck to you
0 votes Thank Flag Link Fri Dec 14, 2012
Hello Stephanie, You will be allowed to inspect the home with the utilities on and have a 15 day inspection period to back out if you find something. You will be guaranteed a clean title from a title company. HUD also has a property inspection done and post it on their website. I have found the inspections to not be exactly correct so you may still want to atleast do an inspection of the home yourself although an inspection can professionally be done for a few hundred dollars.

If a home needs a little cosmetic repair, you may opt for Streamline 203k which you can choose new carpet, paint, etc from 5k up to 35k within this type purchase loan and close within 45 days.

http://www.under640ficoscoreloans.com/Pages/203K.aspx

http://www.under640ficoscoreloans.com/Pages/203KGuidelines.aspx

http://www.under640ficoscoreloans.com/Pages/ContactSheryl.aspx
Sheryl Arndt, Real Estate Broker – Sr. Loan Officer CA only
REO & Short Sale Specialist
Credit Repair At No Cost
20+ Years Experience
DRE# 01140252
NMLS# 297251
760-486-4225
0 votes Thank Flag Link Thu Dec 13, 2012
Stephanie,
In general, you'll find two type of HUD homes; one that is habitable and non-habitable. Read their disclosures about the conditions. Habitable ones meet conventional financing guidelines. And, non-habitable are the ones that need repairs and you won't be able to get it with a low down payment conventional financing, perhaps with a large down payment. Or, you can get it with an FHA 203k financing which includes an rehab repair amount to bring property up to code.
The advantage of this loan is that you come up with a minimum down payment as low as of 3.5% and a low fix rate in one loan! The only disadvantage is that you would pay mortgage insurance premium, usually paid up front financed in the loan and a monthly thereafter.

Happy holidays!
0 votes Thank Flag Link Wed Dec 12, 2012
Generally they need repairs and financing may be difficult as a result. If you are handy and can get the money, they can be a good long term investment as often they are priced below market. Find a good agent to work with. The paperwork and process can be cumbersome.
0 votes Thank Flag Link Wed Dec 12, 2012
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