We're Experts in HUD and Bank Owned Homes
If you are interested in a HUD, Bank Owned, Foreclosure, or Short Sale transaction, I'd be glad to provide any additional information you need, or to assist you during the transaction.  Call me at 816-213-0072, or tonya@key2kc.com for professional guidance!

Tonya Robins

The Gamble Team RE/MAX

HUD Homes—What are they?
When an individual has an insured mortgage by the Federal Housing Administration (FHA) and then haven’t made their payments, the home is foreclosed upon by the lender. The balance of what is owed to the lender is paid by the FHA and subsequently the home becomes property of the United States Department of Housing and Urban Development. The home is marketed and sold. 

HUD Homes—How are they purchased? 
HUD homes are listed for sale in the MLS (Multiple Listing Service-Realtor database), and the local “Broad Listing Broker Site” (www.bidselect.com).

All HUD homes are sold via Electronic bids-placed by Registered Realtors on a purchaser’s behalf.  In our area, homes are listed for sale on Fridays, and typically sold the following Monday (10 days from offer date)-with the bid deadline being midnight on the the 9^th day. In order to promote home ownership only Owner Occupants are eligible to purchase the property during the initial offering period (first 10 days) only. HUD is serious about this requirement and does require buyers to sign an acknowledgement that they will live in the property after closing.

When the auction period is over and the bids are open, HUD accepts offer based on the bid that is the highest net to HUD.

If no bids meet the minimum HUD requirements the property becomes eligible for purchase again, and by all purchasers including investors. Auction deadline for bid submission becomes one to four days-depending on the property.

HUD Homes—Who can buy one?

A HUD home may be purchased just like any other home. As long as an individual has cash to pay, or qualifies for a mortgage, then a HUD home may be purchased. A broker or real estate agent registered with HUD must submit the bid on the property for an interested buyer. The potential purchasers must have proof of cash or a pre-qualification letter for a mortgage before buying a HUD home.

Property access

Potential purchasers of a HUD home must be accompanied by a HUD registered real estate agent when visiting HUD homes for sale.  Registered agents have a special HUD key that allows them to access the property.  HUD regulations require that all potential buyers be accompanied by the broker or agent at all times when visiting the home before closing.  Individuals performing certifications, inspection, appraisals, or other services must be accompanied by a broker or agent as well.   

Repairs, improvements, and occupancy before closing
Unlike a  "traditional" property for sale- no work may be done on any HUD property before closing. Even though a bid is accepted, that does not mean ownership has transferred.  The home is not considered sold until it has been recorded with the buyer’s name at the county courthouse. The home may not be entered, occupied, or used for storage until the ownership has been transferred. Doing so is considered trespassing, which could result in the cancellation of the sale, forfeiting deposits, and even bidding privileges suspension for the agent firm.

Financing requirements for a HUD Home
Financing is not provided by HUD for HUD properties. FHA financing, cash, or conventional bank financing may be used to purchase HUD properties. A mortgage pre approval (not just a pre qualification) letter or a verification of cash funds must be obtained prior to bidding on a HUD home.   All offers for HUD homes require either a $500 earnest deposit (for purchase prices under $50,000) or $1,000 earnest deposit (for purchase prices over $100,000).  This money is collected up front at the time of the initial offer, and must be in the form of a Cashier’s check or money order.  This money is applied to the borrower’s down payment or closing costs. Did you know that you only need a minimum credit score of 580 to qualify for an FHA loan?   Click here for a no obligation pre approval 

Costs paid by HUD

Hud will pay up to 3% of Buyer’s Closing costs and the commission of the real estate agent who represents the buyer.

$100 down payment 

If you qualify based on credit, it is possible to purchase a HUD home with only $100 down-what a deal!  Call us to find out more!