Do I Qualify for a HUD Home?

In real estate markets where inventory is low and competition is fierce, buyers are expanding their search options to include HUD homes and distressed properties. But what exactly is a HUD home and how do you know if you qualify for one?

So what exactly is a HUD home?
HUD homes are residential properties that contain one to four units. Properties become part of the HUD (the U.S. Department of Housing and Urban Development) program when the previous Federal Housing Administration (FHA)-backed mortgage goes into foreclosure. HUD recovers the property to sell at fair market value, recovering losses on the bad debt. These properties are sold “as is” with no warranties on the condition of the home.

Can anyone buy a HUD home?
Fortunately, buying a HUD home isn’t all that different from a traditional sale – at least in terms of qualifying. The HUD is not actually a lender, so anyone with the cash or an approved loan can qualify for a HUD property. For FHA-insured properties, buyers can qualify for FHA financing with only 3.5 percent down with a minimum credit score of 580.

Restrictions:
The HUD requires owners to reside in these homes after purchase.  If the home requires less than $5,000 in repairs, it can qualify as an FHA-insured HUD property. If it needs more than $5,000 in repairs, it is considered an FHA-uninsured HUD property. The differences here are important because investors can bid on the property sooner if it is an FHA-uninsured property. Bids, or offers, are made through a HUD-approved realtor.

Depending on your budget and situation, purchasing a HUD home could be a great option. The first step is to find an experienced pro who is skilled in these types of sales. If you’re interested in checking out HUD homes 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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