What is a HUD home?
A home that has gone into mortgage default with a loan that is insured by the Federal Housing Administration (FHA) is referred to as a HUD Home. When this occurs, the lender takes possession of the property and conveys ownership to HUD. HUD then sells the home through their Asset Management (AM) contractor, such as BLB Resources. A HUD Home may be a single-family house, townhouse, condominium, mobile home or a multiple family attached home up to 4 units.
Who can purchase a HUD Home?
HUD Homes may be purchased by any individual, company, HUD-approved non-profit organization, or government entity that can secure financing or pay cash for the property. Interested buyers must submit bids through a HUD-registered real estate agent Such as Flagstaff Top Producers Real Estate. A prequalification letter from a lender is required for buyers obtaining financing. Cash buyers are required to provide proof of funds for at least the amount of the purchase price. HUD will award the winning bid to the purchaser with the highest acceptable net to HUD. Up to 3 back-up offers may be selected as well. Back-up offers will be honored until the property closes. Winning bids are subject to completion and receipt of all required documentation by BLB Resources.
Who can sell a HUD Home?
Any real estate broker registered with HUD, or real estate agent working for a registered broker, may facilitate the sale of a HUD Home. All brokers MUST be registered with HUD prior to submitting an electronic bid. Only licensed brokers/agents that are registered with HUD and have an active NAID (Name and Address Identifier) may submit these bids.
How do I find HUD Homes available to purchase?
The team at Flagstaff Top Producers Real Estate can provide you an up to the minute report of all available listings quickly and efficiently. Or login to http://www.HUDHomeStore.com. A HUD-registered broker or real estate agent must submit an electronic bid on behalf of an owner occupant, investor, or Good Neighbor Next Door purchaser.
What is an Owner Occupant?
An owner occupant purchaser is a person who plans to live in the property as their primary residence for at least 1 year, and has not purchased another HUD Home as an owner occupant within the past 2 years.
What is an Investor?
An investor purchaser is someone who buys the property as a second home or as an investment, or who does not qualify as an owner occupant.
Will HUD pay for any closing costs and the selling agent’s commission?
HUD will pay up to 3% of the purchase price in closing costs that are considered to be reasonable and customary in the jurisdiction where the property is located HUD does not pay any closing costs or commissions on Good Neighbor Next Door (GNND) properties.
When can the buyer get a home inspection done?
All HUD Homes are sold “As Is.” HUD does not make any repairs to the property. Therefore it is important that the buyer do a visual inspection of the property prior to submitting a bid. The buyer is also encouraged to have a professional home inspection performed with the utilities activated, AFTER the contract has been accepted and signed by HUD. The buyer has a 15 day period after contract ratification to activate utilities and complete the home inspection. All inspections, tests, and risk assessments are performed at the purchaser’s expense.
HUD’s “As Is” Policy
HUD Homes are sold in “As Is” condition, and without warranty. BLB Resources and HUD make no representation or warranties, expressed or implied, concerning the condition of the property, and will not make repairs to the property. Since the new owner will be responsible for making any needed repairs, HUD strongly urges every potential homebuyer to get a professional inspection. All inspections, tests, and risk assessments are performed at the purchaser’s expense.
Want to learn more? Please call our office at (928) 214-7100. We’re happy to help!
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