Buying a foreclosed home from the federal government can be a great option for families and investors.

Buying foreclosed homes from the federal government can be greatly beneficial to families striving for home ownership, as well as investors looking for ways to generate supplemental income.

shutterstock_186415976In many cases, the benefits that come with federal foreclosed buying far exceed the possible risks. Whether you want to purchase a home to occupy or you're an investor trying to make money from purchasing HUD foreclosed homes, be sure to weigh the advantages and disadvantages of this type of purchase. Then you’ll know exactly what to expect beforehand.

Because prices are often much lower on this type of housing, buying homes foreclosed by the federal government has quickly become a way for low-income or moderate-income families to buy homes.

Foreclosed HUD homes are priced below market value for a reason: the government wants to earn enough money from the sale to satisfy the original amount of the mortgage loan. Foreclosed HUD homes do not typically make a profit - but are a way for the government to recover their losses from the previous loan holder, their goal is often to simply break even.

Some may argue that foreclosed homes have steep competition, however there are many government-foreclosed properties available. Given the sheer variety of options available, it may actually be easier for a family or investors to find an ideal property.


Moreover, you should be mindful of the disadvantages as well. When you buy a foreclosed home from the federal government, you will get the home in the current condition, good or bad. Any repairs the house needs will be your financial responsibility. In addition, it is highly likely that some repairs will be necessary. With so many HUD homes on the market, they can sit empty for years.

Weather damage and a lack of regular maintenance can cause even the best-built homes to fall into disrepair. Be aware that the government is under no financial obligation to help you make any repairs after the close of the sale.

Buying foreclosed homes from the federal government can be a great way to invest your money or achieve homeownership, provided you know the advantages and disadvantages. Use RealtyNow for answers to more questions about buying a property. To view listings of foreclosed homes, enter a zip-code above.