If you decide to buy a HUD home, FHA lenders are plentiful and easy to find. You can ask your local lender if they offer FHA loans or search for lenders online.
If you want to buy a U.S. Department of Housing and Urban Development (HUD) home using a Federal Housing Administration (FHA) loan, there are several lenders who can help. When you buy a HUD home using an FHA lender, the mortgage is insured by the federal government, yet the loan comes from a traditional lender.
You may qualify for an FHA loan if you are buying a home through a traditional sale or a HUD home from the federal agency itself. HUD owns thousands of homes in the country right now because buyers defaulted on federally-insured loans and HUD paid the lenders the loan amount and took possession of the properties. These foreclosed homes sell at low prices and may be financed with FHA loans again.
The first thing you need to do when you want to buy a HUD home from an FHA lender is to locate a lender who participates in FHA loan programs. You can talk to lenders you like and then see check HUD's website to see if they participate. The lender will determine how much money you can borrow for a home. It is best to get pre-approved because foreclosed homes often sell quickly.
Once you have your lender, you need to find a HUD-approved real estate agent. Tell the agent what you need and amount of your pre-approval. Your agent will know the bidding process and be able to place a bid for you.
How much you need to put down on the home will depend on the loan program you use and the HUD requirements for bidding. Typically you will need to make a deposit or offer earnest money on a specific percentage of the home's selling price. If your bid is accepted, the deposit will apply toward your down payment. If your bid is not successful, then your deposit will be returned.
You may decide that buying a HUD home is too complicated. You can use an FHA loan to finance almost any type of home or foreclosed property. If you want to see real estate listings with foreclosed homes in your area, go to RealtyNow.