HUD Home Foreclosure

HUD Home Foreclosure
05-19-08

A home that is being listed as a HUD home foreclosure is usually one that was bought with an FHA loan. For one reason or another, the owner's of the property went into default and the bank repossessed the property. When this happens, the property deed is handed to Housing and Urban Development and then it is offered to the public.

Because these properties are vacant during the time it takes to go through the entire procedure, the properties are sold in the condition it was left in by the previous owners. If there is more than five thousand dollars worth of repairs that need to be done before the property can be occupied, HUD offers a program to loan the money to the buyer to rehabilitate the property. When these homes are vacant, there are no utilities running which may cause additional repairs to be made. It is highly recommended that the buyer bring in a house inspector to determine if there are any other damages that need to be addressed.

Lenders who foreclose on an FHA loan are able to recover most of their losses because the owner of the home pays a mortgage insurance premium. From there, the government agency is responsible for selling the house. Once the property is turned over to the government agency, it takes approximately six to twelve months for them to obtain the deed. It then takes an additional six to twelve months to complete the final repossession process and FHA to be reimbursed before the government agency can list the property on the market.

Before you purchase a HUD foreclosed home, consult a knowledgeable real estate agent. They will be able to walk you through any pitfalls that may be involved in buying the ‘as is' property. The real estate agent will also be able to walk you through the various steps of financing this type of house. If you are a teacher or police officer, make sure you look into the special programs available to you in purchasing one of these properties. This is because there can be special concessions for those doing community services.

When you are ready to purchase your HUD foreclosed home and have your financing in place, make sure you know when your bid is due. With the convenience of the Internet, an authorized agent can place bids right up to midnight of the night it is due. Make sure you print your bid so that you can easily find it once the bid is placed. You also want to look for properties that are listed for ‘All Purchasers'. Anyone can bid on these properties and the highest bidder is not always the bid that is accepted.

In review, do your homework before you begin to look for a property that will be perfect for your house. Make sure you understand the rules and regulations in buying a HUD foreclosure home. Make sure you do not look at something that you cannot afford and stay in your price range. Also, try and pre-qualify for you loan so that you know exactly how much is in your budget. If you follow these simple rules, you'll be able to get the best deal for a new house.

Mark E. Moebius
Miljonair Homes
Custom home builder St. Louis
3451 St. Albans Rd.
St. Albans, MO 63073
636.300.9000