What is a HUD Home?

I have been asked this question many times, mostly back in the days of selling real estate. A HUD Home is a home that has been foreclosed on that was insured by the Department of Housing and Urban Development (a.k.a. HUD). These are typically FHA loans that have defaulted

You can do a search on the HUD website to see if there are any HUD homes in your area. HUD wants to get rid of these properties and they even offer several programs to help people qualify for HUD homes including:

  • Low to moderate income families.
  • Non profit organizations.
  • Those who work in the community service such as teachers, firefighters, emergency workers and law enforcement officers.

The HUD website has all of the details about these special programs and also how one can qualify.

All of the details you would need to understand the process of buying a HUD home is available on the HUD website and can be found here.

The bottom line is that HUD homes can represent great deals for families seeking to find their first home so you owe it to yourself to check it out. If you decide this is the route for you, I encourage you to work with a trusted real estate professional that has experience in selling HUD homes because this will not be a standard real estate transaction and you could end up losing lots of money if you don’t know all of the right steps to take.

 

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The Foreclosure Market is Not a New Market

The influx of real estate investors over the past 9 years has sadly created a huge volume of foreclosures, mainly due to banks allowing novice investors to overextend themselves (both fueled by greed in many cases.) It has also created lots of opportunities in the niche real estate markets dealing with short sales and foreclosures, leading people to believe that these are new problems in the real estate marketing.  Foreclosures have been around ever since real estate lending has been around because the rules have always stated “if you pay, you stay, if you say no, you go.”

Of course, much has changed over the past several years in the real estate markets as a result of all of the turmoil. Banks tightened up their requirements for quite some time, but now I see them loosening again. That’s not to say you can easily find 100% investor financing (as you could just a few years back) but it’s always a great time to buy and now in many parts of the county is even a better time to buy because prices are coming back up. Here is sunny Arizona (where I first came to invest in real estate), prices are definitely on the rise and the old school tactics of multiple offers on properties are now becoming more and more common.

If you are looking to buy a foreclosure, my closing advice it treat slowly, do your due diligence, and next trust a deal that seems too good to be true; it’s not!

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