In the unstable, empty-house riddled real estate market today, many cities are bursting at the seams with HUD foreclosures that have been awaiting buyers for well over six months. The Department of Housing and Urban Development (HUD) administers federal aid to local Public Housing Agencies (PHAs). HUD will give you an opportunity to perform an inspection, however they will not make any repairs to any foreclosed home they sell. HUD homes that are for sale can be a great way to purchase your own home or find opportunities for real estate investment properties.
Since HUD utilizes a competitive bidding process to determine which offer to accept, part of the analytical process in selecting the winning bid includes deducting the broker’s commission and closing costs from the offer up front. If, after 6 months, no one has purchased a HUD property, HUD will sell it for $1 (one dollar!) to a nonprofit organization that caters to housing for needy families.
Even after the former owner vacates the property, it takes time for the original lender to process the paperwork and transfer the property to HUD. HUD will award the winning bid to the purchaser with the highest acceptable net to HUD. In addition to weekly newspaper advertisements in the real estate classifieds, HUD homes are also advertised through a number of other sources.
Services such as RealtyTrac provides members with the listings and resources required to find and purchase HUD properties, whether you’re new to HUD foreclosures or an experienced bank home investor. If you think you’ve been discriminated against for these reasons, file a complaint as described above, or email HUD at [email protected] with general questions about LGBT housing issues.
This article is written for home buyers, not investors, and I will discus the things they should know before making a bid on a HUD house. To make a profit out of it, HUD then assigns the HUD home to a Management and Marketing Contractor which will then clean and beautify the house and will have it appraised by and FHA appraiser.