Can I buy a HUD Home as an Investment?

HUD homes can be a great deal for owner-occupant buyers and investors alike. However, if you’re considering a HUD home for investment purposes, you’ll have to wait your turn. If you’re not familiar with this type of property, a HUD home is when a government-insured loan (FHA) gets foreclosed and the Federal Housing and Urban Development (HUD) pays the defaulted loan off and then puts the home on the market.

HUD homes are available for investors to purchase; however, priority is given first to owner-occupant buyers (people who are planning to live in the property after it is purchased), non-profit organizations, and government agencies. Following the priority process, unsold properties are available to all buyers, including investors.

How is buying a HUD home different for an investor?
The process for buying an owner-occupant HUD home and buying a HUD home as an investor is different.

Earnest Money:
HUD considers investors to be savvy and experienced when buying a home.  That means they will keep an investor’s earnest money if the investor backs out.  HUD allows an inspection to be done, but if an investor backs out due to inspection issues, HUD will also keep that money.

Title Insurance:
HUD does not pay for title insurance. You may use HUDs title company or your own, but you will have to pay for title insurance and closing fees.

Inspections:

HUD does not turn on utilities for inspections.  It is the buyer and their agent’s responsibility to request permission to turn on the utilities and then turn them on.

If you understand the process and how it works, investing in a HUD home can be a great opportunity. If you’re interested in checking out HUD home investment opportunities in the Denver area, contact Metrowest . We specialize in these types of sales and would love to help you start the process!

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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