A HUD home is a 1-to-4 unit residential property which has been acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD homes are listed on the HUDHomestore website and in the local Multiple Listing Service (MLS). In order to be fair to all purchasers, HUD has imposed timetables that must be met or your bid or contract will be cancelled and the home returned to the market.
During any step in the buying process if the terms and timelines of the contract are not followed exactly you can lose the HUD home you’ve got under contract. The best way is to look at MLS and count the number of days it has been actively for sale. MOST HUD Homes will have a disclosure of repairs needed to meet FHA Guidelines, this can be used to get an idea of some ideas repairs the appraiser might note.
Mr. Kelly noted that HUD does have methods for checking on the residency requirement and has prosecuted buyers who knowingly violated that rule. Initially, I was thinking of having my first investment be a triplex or fourplex, rent out the other units and live in one.
When the foreclosure process has been completed, the lender submits its HUD insurance policy back to them with foreclosure costs, accumulated interest and legal fees for reimbursement. The Department of Veterans Affairs (VA) offers the HUD-VASD for homeless veterans It combines HUD housing vouchers with VA supportive services.
Since HUD is a major mortgage lender, they also have to deal with foreclosures, like any other lender. Let your lender know you are looking at HUD’s, because there is no need to use a more restrictive VA loan when buying a HUD property. It’s critical to recognize that the list price for a HUD Home is almost never the price you’ll pay.