In any real estate market – including seller’s markets like Denver – everyone is looking for the best deal possible. HUD homes, while different than traditional homes, can be a great value – especially in areas like ours. What is a HUD Home? In the simplest terms, a HUD home is a property owned by the U.S. Department of Housing and Urban Development (HUD). Before a home becomes the property of HUD, it was likely owned by a regular homeowner who was no longer able to pay the monthly mortgage, so the home ends up in foreclosure. When this happens, the home goes to HUD, which then must figure out how to unload this home and make its money back.
Many people think distressed housing has to be paid for in cash, but when it comes to the HUD, there are actually several financing options that buyers can take advantage of.
- HUD “Good Neighbor” program offers HUD homes in revitalizing areas at a 50% discount to community workers (e.g., teachers, police officers, firefighters, and EMS personnel) who plan to live in the property for at least 36 months.
- If the HUD home you’ve got your eye in is indeed a fixer-upper, you may qualify for a special kind of loan that can help you give your new home the attention it needs. This loan is known as an (FHA) 203(k) rehabilitation loan and it’s an ideal option for any buyer interested in a HUD fixer-upper because it allows you to purchase the home with a reserve that’s put in escrow to fund renovations.
- Buyers can also utilize a traditional FHA loan. While the FHA doesn’t directly finance buyers, depending on your financial situation, your lender can qualify you for an FHA loan.
Ready to check out HUD home offerings in the Denver area? The first thing you want to do is get an experienced pro on your side. Metrowest specializes in these types of sales and would be happy to help you start the process. Give us a shout today!