When housing markets are super competitive, homeowners often turn to distressed housing (HUD homes, foreclosures, etc.) to help expand their options. Plus, depending on the distressed housing you look at, there are some very appealing incentives!
HUD homes can be very attractive due to their lower price point, but most of the time these types of properties come with a list of repairs and upgrades you’ll need to make. A property reaches the HUD home status when a government-insured loan (FHA) gets foreclosed and the Federal Housing and Urban Development pays the defaulted loan off and then puts the home on the market.
HUD home repairs can range from small cosmetic changes to extensive improvements, which makes it crucial to get a thorough inspection. Home buyers who can put a little time and money into addressing necessary renovations can really make a property their own. Plus, if the HUD home you’ve got your eye in is indeed a fixer-upper, you may qualify for a special kind of loan that can help you give your new home the attention it needs.
This loan is known as an (FHA) 203(k) rehabilitation loan and it’s an ideal option for any buyer interested in a HUD fixer-upper because it allows you to purchase the home with a reserve that’s put in escrow to fund renovations.
Who can get a fixer upper loan?
These types of loans are ideal for people who can afford the mortgage payment, but don’t necessarily have a lot of cash on-hand to be able to pay for renovations up front.
A (FHA) 203(k) loan is also good for first-time buyers with limited budgets who want to live in a particular area. These loans make it feasible for buyers to get a less expensive home in a desirable area and renovate it.
While inventory numbers are slowly increasing in Denver, distressed housing is a great option for many home buyers. If you’re interested in checking out HUD homes in Colorado, the first thing you’ll want to do is find an agent experienced with the HUD home buying process. Metrowest specializes in these types of sales – give us a shout today, we’d love to work with you!