HUD Housing 101
The short form, HUD, stands for U.S department for Housing and Urban Development. In fact this is probably the most important program for a low income individual or family looking for housing.
What Does This Program Do For Me?
This department offers various houses to people at costs which are 10 to 50% less when compared to their real market value. With the help of the internet or a licensed real estate agent, one can easily find a HUD home that best suits them.
What Does A “HUD property” Mean?
There are a large number of people who want a house or a property but can’t because of their inability to come up with the down payment or financing through traditional means. The person also may not be eligible for a typical bank loan. That’s when HUD kicks into gear. The federal housing administration (which is a part of the HUD), provides low interest rate loans to qualified applicants. The person may also borrow money from other approved lenders endorsed by HUD.
If the person is not able to repay the loan, the lenders would initiate the process of foreclosure. At the end of this process, the property will be 100% owned by HUD.
One thing to note is that HUD does not make the foreclosure but instead pays the mortgage value and takes up the ownership of the property.
What’s the Eligibility Criteria?
- HUD aims at providing homes to people who have low or moderate incomes. Therefore people fitting this profile are given more preferential treatment in the application and approval process.
- The applicants must also submit a record of stable income.
- The applicant must also prove that they do not have any outstanding, serious debts.
Where Can I Find a HUD Home?
The internet can be used to find HUD homes. We offer a resource of low income, section 8 and HUD home listings. You can view section 8 and HUD homes in your area by clicking here. In addition, the HUD Home Store website can also be used to perform additional nationwide HUD home searches. If you prefer a more personal touch, local real estate agents should be knowledgeable and well versed about HUD homes in your area of choice.
The Bidding Process
You didn’t think you were the only one that wanted that house you’ve got your eye on now did you? 🙂 Bidding for a HUD home is a two stage, online process.
- In the first stage, the applicant seeking to occupy the house will be considered.
- In the second stage, other people interested in the property are also considered.
Once the bidding is over, the winner will have to submit a contract within a strict 48 hours time frame.
All the different details pertaining to occupancy will be clearly noted in the contract. The cost of the property, the money required to be paid to the agent and all the repair costs must be written into the contract. The agents will be paid 6 percent of the total cost by HUD. You can view/print the contract by clicking here.
The person buying the house must hire a skilled inspector to assess maintenance requirements of the house. The inspection team will analyze every important factor such as availability of water, electricity etc.
One must make sure that they take full advantage of all the different incentives that are available to them by going through the HUD program. To find out more about this, I suggest contacting a local real estate agent.
Closing the Deal
Within 30 to 60 days the applicant must be able to meet contractual requirements in addition to securing financing. In some cases there will be provisions made to secure more time to meet these requirements.