Purchasing a HUD home can be both a great value and a wonderful way to break into homeownership – especially if you’re in an area with a low inventory of single-family homes. If you haven’t considered this option, it’s certainly worth a look, as these homes are typically more affordable and there are several ways to finance the purchase.
FHA loan
You can absolutely purchase a HUD home with a traditional FHA loan. While the FHA does not make loans directly to homebuyers, your lender can qualify you for an FHA insured loan. Benefits of going the FHA route include:
- Lower down payments
- Lower closing costs
- Easier credit qualifying
203(k) Rehabilitation Mortgage Insurance
If you’re looking to purchase a HUD home that will need a good deal of renovation, the FHA’s Limited 203(k) program permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. This allows homebuyers and homeowners to quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser. With this type of loan, homeowners can make property repairs, improvements, or prepare their home for sale.
If you’re interested in checking out HUD home options in the Denver area, start with Metrowest. Our agents are experienced in these types of transactions and would love to work with you!