Perks of Buying a HUD Home

Many people looking to score a deal while house hunting choose to consider including HUD homes in their searches. There are a lot of perks in going this route, but only if you truly understand the process.

So what exactly is a HUD home? In the simplest of terms, a HUD home is a property owned by the U.S. Department of Housing and Urban Development (HUD).

How does a house become a HUD home? Long before a home becomes the property of HUD, it typically was owned by a regular homeowner who’d made this purchase with an FHA (Federal Housing Administration) loan. If the owner ends up unable to pay the monthly mortgage, he or she ends up in foreclosure on the FHA loan, which means the home goes to HUD, who then must figure out how to unload this real estate and make back its money.

HUD doesn’t want to own these foreclosed homes any longer than it needs to, so these homes are priced to move, often below market value. Plus, the government agency offers special incentives to buyers in certain markets to sweeten the deal on a HUD-owned home.

One example of this that we’ve discussed before is the “Good Neighbor Nextdoor” program, which offers HUD homes in revitalizing areas at a 50% discount to community workers such as teachers, police officers, firefighters, and EMS personnel, who plan to live in the property for at least three years.

Other HUD perks:

  • Low down-payment requirements or sales allowances you can use to pay closing costs or make repairs on the HUD home—not to mention, FHA financing options. So be sure to inquire with your real estate agent about the unique home-buying possibilities – the HUD route could be an even better bargain than how it first seems.
  • Another bonus for home buyers is that HUD gives preference to owner-occupants who intend to live in the home for at least three years, so odds are good you’ll beat out investors as well.

Despite what you may have heard, HUD homes can be a great value and aren’t much more complicated than traditional sales. If you’re ready to start checking out HUD homes in the Denver area, contact Metrowest. We specialize in these types of sales and would love to help you through 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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