You can qualify to buy a HUD home with down payment assistance
Buying a U. S. Department of Housing and Urban Development (HUD) foreclosure gives you the opportunity to get a home at a deeply discounted price. You can also qualify to buy a HUD home with down payment assistance and a Federal Housing Authority (FHA) loan. Combined, you stand to get great savings on a home, a low interest mortgage and help closing the sale.
What Are HUD Homes?
HUD homes are foreclosed homes that had mortgages backed by the government. HUD pays the lender for the insured mortgage and takes possession of these homes when the owners default on the home loan. Because thousands of homeowners across the country have defaulted on homes with FHA loans, HUD has many homes for sale.
Who Can Buy HUD Homes?
Anyone who can qualify for a mortgage loan or who has sufficient cash can purchase a HUD home. The homes are offered to owner-occupants first, if no one bids on them, the bidding is opened to investors. If you are interested in buying HUD foreclosures, you will need a HUD- approved real estate agent to place bids for you. You view HUD homes on this HUD website .
Financing a HUD Home Purchase
HUD and the FHA don't offer home loans. The agencies provide home loan programs for you through traditional lenders. You may also qualify to buy a HUD home with down payment assistance through one of the FHA grant programs.
Even without a grant, you can finance a HUD home with a down payment as low as 3.5 percent. This may be very helpful if you are a first-time homebuyer without equity from a prior home to use as a down payment. Of course, you can also buy a HUD home with cash or a conventional mortgage.
If you choose to buy a HUD foreclosure, the home may need significant work. If it does, you can apply for a HUD 203(k) loan that includes the cost of repairs in the mortgage. This negates the biggest drawback of buying foreclosed homes from HUD, as the properties are sold as-is.
If you want to look at other foreclosed homes in your area as well as HUD homes, go to RealtyNow for free property listings. RealtyNow can also connect you with a qualified real estate agent.