A HUD home is one that was purchased with an FHA (Federal Housing Administration) loan that has since fallen into foreclosure, and it’s fast becoming a popular consideration for areas experiencing low inventory and increasing home sale prices. If you’re considering purchasing a HUD home to break into homeownership, you may have questions as to who can actually buy this type of property.
There are five types of buyers identified by HUD who are eligible to purchase HUD-owned homes. Certain conditions must be met to determine the eligibility of a buyer to bid on a particular home, and only registered bidders can make offers on properties. This makes it incredibly important to hire an agent experienced with these types of transactions!
Owner Occupant: eligible owner occupants are individuals with a valid social security number who have not purchased a HUD property with the past two years. Owner occupants rank above non-profits and government agencies in the bid selection process for exclusive and extended listings.
Investor: eligible investors are individuals with a valid social security number or Employer Identification Number (EIN). They can only bid on homes in the extended phase and are ranked below other types of bidders in the bid selection process.
Good Neighbor Next Door (GNND): law enforcement officers, pre-Kindergarten through 12th-grade teachers, firefighters, and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return, you must commit to live in the property for 36 months as your sole residence.
Nonprofit: eligible nonprofit organizations can bid on homes in lottery, exclusive, and extended phases provided they are in approved purchase areas. Nonprofits rank below government agencies in the bid selection process for the lottery, but above them for exclusive and extended listings.
Government Agency: approved government agencies can bid on homes in lottery, exclusive, and extended phases provided they are in approved purchase areas.
Think a HUD home may be the right choice for your needs? Contact Metrowest today! We specialize in these types of sales and would love to help you start the process!