Frequently Asked Questions (And The Answers)
Questions about HUD Homes
- What is a HUD home?
- Can anyone buy a HUD home?
- Does HUD make repairs to their properties?
- Can I buy a HUD home as an investment property?
- How do I make an offer to purchase?
- What kinds of loans are available to purchase HUD homes?
- Why do I have to get a pre-approval letter before I bid?
- Can I Use my VA eligibility financing?
Questions about VA Homes
- What is a VA home?
- Can Anyone buy a VA home?
- What kinds of loans are available to purchase VA homes?
- Does the VA make repairs to their properties?
- Can I buy a VA home as an investment property?
Questions about Bank-Owned Properties
- Can anyone buy a bank-owned home?
- Can I take over the previous mortgage?
- Do banks make repairs to their properties?
- Why do I have to get a pre-approval letter before I bid?
How do I get started?
Start by completing the sign up form or contacting us on our toll-free number. We will contact you to set up a no-obligation consultation at your convenience. Then we will assess your needs and arrange a pre-qualification application. (unless you are already pre-qualified) We will also inform you on the advantages of buyer agency, where we can work for the best interests of you, the buyer.
What is a HUD home?
The Federal Housing Administration (FHA) is the organization of the U.S. Department of Housing and Urban Development (HUD) that insures certain mortgage loans for lenders. If the lender forecloses on the loan, FHA repays the balance of the loan to the lender and the title to the home reverts to HUD. HUD then sells these homes at market value.
Can anyone buy a HUD home?
Anyone who is pre-qualified for a mortgage may offer to purchase a HUD home. These homes are not exclusive for low-income buyers, but most are regarded as affordable to low to moderate-income purchasers within the market areas where they are located.
Does HUD make repairs to their properties?
HUD homes are sold "as-is", without warranty. That means HUD generally will not make repairs except to preserve and protect the property or to eliminate a major safety issue. Known defects are reflected in the price and stated in the listing on the property condition summary sheet.
Can I buy a HUD home as an investment property?
Yes. There is an initial period when only owner-occupants are allowed to purchase, after which time the investors may also buy.
How do I make an offer to purchase?
As your broker, we can place an offer in the form of an electronic bid on your behalf as long as HUD's guidelines are met.
What kind of loans are available to purchase HUD homes?
The following are acceptable financing instruments for purchasing HUD houses: Federal Housing administration (FHA) loans, Veterans Administration (VA) loans (subject to certain restrictions), conventional loans and cash.
Why do I have to get a pre-approval letter before I bid?
A bidder must show evidence of the financial ability to close before a contract is entered into. This is to avoid tying up the property with a transaction that is unlikely to close. The "pre-qualification letter" must be directly from the lender (not the mortgage banker) giving the current date and the amount of the loan that is acceptable. It should also name the buyer(s) whose credit report was reviewed and approved by the lender.
Can I use my VA eligibility financing?
Yes, unless the VA underwriter requires the seller to make repairs prior to closing. This requirement may be in conflict with HUD's policy to sell homes "as-is" except for preservation and protection of the home.
What is a VA home?
The Veterans Administration (VA) insures certain mortgage loans for lenders on behalf of eligible veterans and their spouses. If the lender forecloses on the loan, VA repays the balance of the loan to the lender and the title to the home reverts to the VA. The VA then sells these homes at market value.
Can anyone buy a VA home?
Yes. Veteran and Non-Veteran buyers are eligible.
What kinds of loans are available to purchase VA properties?
FHA loans (subject to certain restrictions), Conventional loans, cash and special VA vendee financing are acceptable financing instruments for purchasing VA homes.
Does the VA make repairs to their properties?
VA properties are sold "as-is" and will generally not make repairs to their properties except to preserve and protect the property or to eliminate a major safety issue.
Can I buy a VA home as an investment property?
Yes. Investors may purchase these properties.
Can anyone buy a bank-owned home?
Yes. Anyone can purchase bank-owned homes. Many homes are affordable to low and moderate-income purchasers.
Can I take over the previous mortgage?
No. These loans have been purchased and eliminated at the sheriff sale. These homes are then sold at market value in their present condition. Price reductions may take place if the home does not sell.
Do banks make repairs to their properties?
No, these homes are sold "as-is" without warranty. This means that the condition of the home when you see it is what you will be buying. They do not guaranty the condition of any home, and do not verify that it complies with any local code or zoning requirements.
Why do I have to get a pre-approval letter before I bid?
A pre-qualification letter or a proof of funds letter must be provided with all offers.
