What is a HUD Home?
December 16, 2016
What is a "HUD Home" or a HUD Foreclosure?
HUD homes or HUD foreclosures are homes that were purchased with a FHA loan. When a buyer obtains a FHA loan, the federal government insures the loan. If the buyer defaults on the loan (stops making mortgage payments) the department of Housing and Urban Development pays off the loan and puts the home on the market with a local real estate agent to market and sale.
Condition of HUD homes vary, however they are always sold "as is". HUD homes that do not qualify for conventional or FHA financing, due to condition, very often are purchased with an FHA escrow repair loan or FHA 203K loan. These loans allow the purchaser to close on the home and have their contractor make repairs after closing. This is a great way to purchase a home and repair or update it to your liking. Check with your local real estate agent for an experienced loan officer that can explain the details of these different types of loans offered.
Call your local real estate agent or go to HUDHomestore.com for a list of HUD homes in your area.