The Scoop on HUD Homes and why you should consider one

If you’re house hunting in Denver, chances are you’ve come across properties listed by HUD. These types of homes can turn out to be a great deal if you understand what they are and the process of purchasing them.  Let’s start with the basics: HUD stands for the U.S. Department of Housing and Urban Development. A HUD home is one in which the owner had an FHA-insured mortgage but was unable to make the mortgage payment and went through foreclosure. FHA loans are insured by the government, and if a borrower defaults on an FHA loan then the Federal Housing Administration pays the lender the balance on the loan and takes possession of the property.

The government doesn’t want to hold on to these homes any longer than necessary, so they often sell them below fair market value.

Advantages of buying a HUD home
Besides getting a good deal on the price of HUD properties, they come with several other benefits:

  • HUD paid closing costs up to 5% of the purchase amount.
  • HUD homes are already apprised by an FHA approved appraiser so you may be able to close faster if using an FHA loan.
  • You may be able to get up to 3% of your down payment paid for.
  • HUD loan programs are available.
  • Low earnest money deposits ($500-$1000)
  • Preference is given to buyer purchasing as a primary residence over real estate investors.

Financing options for HUD homes:

1) One Dollar Program
The one dollar program from HUD is available to local governments to purchase and offer to low-income families or as public housing. Single-family properties are made available through the program whenever FHA is unable to sell the homes for six months.

2) Good Neighbor Next Door Program
If you’re a police officer, fire fighter, emergency service employee, or a teacher you can buy a HUD home for a great price. It’s called the good neighbor next door program this opportunity is for owner-occupied properties only.

3) Non-Profit Program HUD offers this program to non-profit faith-based organizations, such as churches. This program allows buyers to purchase a HUD-owned home to resell to low-income families and first-time homebuyers.

If you’re thinking of checking out HUD homes in Denver, the first thing you want to do is find an experienced pro to help you navigate the waters. At Metrowest, we specialize in this type of sale. Give us a shout today – we’d 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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