Saturday, January 19, 2008

HUD Foreclosures Are Great Investment Properties

HUD homes are foreclosure homes owned by the government as a result of repossession. The US Department of Housing and Urban Development (HUD) insures certain home mortgages through the FHA. When an FHA-insured home s mortgage is not paid, the property is foreclosed by the lender. HUD pays the lender for their lost money and takes ownership of the property. The foreclosed properties are then quickly resold. Investors often look for HUD homes for sale because they provide an excellent investment. Police officers and teachers get a further 50% off the cost of the listed HUD homes. If you have the money or are pre-approved for a mortgage, you can buy HUD homes. Since these properties are so inexpensive, almost anyone with an income can buy them. Usually, buyers who will be using the home as a primary residence have first selection. These properties eventually become available to all interested buyers if no owner occupants are interested. If you or a relative work for HUD, you must receive written permission for buying HUD homes. HUD homes for sale are bought through HUD-approved real estate agents. The real estate agent will assist you with bidding. The highest bid wins, and if no bids are acceptable, the property is bid on again. Settlement after a successful bid usually takes one to two months. If you cannot arrange financing for the HUD properties within this time, you need to pay to extend the deadline or you lose your deposit. You need to inspect the HUD homes listing you are considering carefully as they are sold as is . When buying HUD homes, you may want to make it a condition of your bid that the agent s commission is wavered. HUD will not help you by providing you with a home loan. However, those buying HUD foreclosures do qualify for FHA loans, and even some private lenders will be willing to give you a loan for HUD houses. Since closing comes so quickly, you may wish to arrange financing before shopping for HUD homes for sale.

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