A HUD home is a home owned by the Department of Housing and Urban Development. If you can buy a HUD home, you may be able to get an amazing deal on the property.
HUD gets these homes when the previous owner fails to make their mortgage payments on their FHA loan. But HUD does not really want to own these homes so they often sell them below their true value. The low prices, combined with incentives for potential buyers, can make these homes a great bargain.
Sometimes there may be a good reason for selling them at low prices. These homes are sold as-is so if something is wrong with them – foundation issues, leaky roof, etc. – you’ll have to fix it yourself.
Even if there are issues with the home, they may still be a great deal though. And there are some great HUD home financing options that can make these homes affordable for many.
HUD Home Programs
Here are some of the most recommended HUD incentive programs for you:
Good Neighbor Next Door
Good Neighbor Next Door’s HUD home programs offers a 50 percent discount for people who work full time in certain occupations. These occupations include teachers, police officers, firefighters and EMTs.
HUD homes offered by Good Neighbor Next Door are located in revitalization areas.
One Dollar Program
HUD’s Dollar Homes program is for low-to-moderate income families. The program is not available to individuals.
HUD homes offered by the one dollar program are actually available to buy for, well, a dollar. HUD homes that are eligible for the programs are HUD homes that have been on the market for at least 6 months.
Nonprofit Program
Aside from local governments, certain nonprofit programs also buy HUD homes for 30 percent off. But only eligible nonprofit organizations can purchase HUD homes.
And nonprofit organizations offer them to first-time buyers and families who have financial difficulties.
HUD $100 Down Program
Much as the name states, HUD homes in this program allows buyers to make a down payment of $100. It is only available for eligible properties so has limited availability. Key requirements are that is for a primary residence that is a single family home (not manufactured homes). And it for full price offers only.
HUD Home Financing Options
HUD home buyers can finance their HUD homes through 4 options. These options that you can choose from are the following:
- Conventional Mortgage: conventional mortgages allow buyers to make a down payment as low as 3 percent to their purchase.
- FHA Loans: financing HUD homes saves buyers money through affordable down payments. Credit requirements are also quite flexible when financing in FHA loans.
- FHA 203(k) Loans: what is great about the FHA 203(k) loans is that it allows borrowers to finance not only their HUD homes, but also the cost of repairs and renovations.
- VA Loans: if you are serving or have served in the military, and you want a HUD home, then financing through Veterans Affairs loans or VA loans is the best option for you. HUD homes are less expensive compared to regular mortgages as they have gone into foreclosure.
These are only some of your options for both HUD home incentives and HUD home financing. Visit the HUD site for more details.