What is a HUD Home?
A HUD home is a 1-to-4 unit residential property acquired by HUD (Housing and Urban Development) as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.
Who Can Buy a HUD Home?
Anyone who has the required cash or can qualify for a loan (subject to certain restrictions) may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.
What Are The Financing Types?
IN (Insurable) versus IE (Insurable with Escrow) – these properties qualify for FHA 203(b) financing and may also qualify for FHA 203(k) financing. IE properties have Minimum Property Requirements (MPR) repairs of less than $5,000 and is the buyer’s responsibility. This repair money is held in escrow and the buyer must make all repairs within 90 days after closing.
UI (Uninsurable) versus UK (Uninsurable, 203k Eligible) – these properties do NOT qualify for FHA 203(b) financing. UK properties have MPR repairs exceeding $5,000 but may qualify for FHA 203(k) financing.
What Are The Listing Periods?
IN and IE properties are available exclusively for owner occupants, nonprofits and government agencies for the first 30 days (initial bid review begins on the 11th day).
UI or UK properties are first placed into a Lottery program for non profit organizations, government agencies or Good Neighbor Next Door participants. If no acceptable bids are received after 7 days in the Lottery program – it is opened up a 5 day owner occupant exclusive listing period. Then, if there are no acceptable bids on the 6th day after the Exclusive listing period, then the property is available for all bidders (bids are reviewed Monday – Saturday).
For Other Common HUD Terms and Acronyms – click here
*Please note this is general information from the https://portal.hud.gov/hudportal/HUD website. For additional information or questions about a specific property or purchase, please complete the Contact Form below!