What is a HUD Home?
HUD stands for the U.S. Department of Housing and Urban Development. A HUD Real Estate Owned (REO) Property, also known as a HUD Home or a HUD-owned home, refers to a one- to four-unit residential property acquired by HUD as a result of a foreclosure on an FHA-insured Mortgage.
HUD pays the original lender the amount of the loan due and other expenses. HUD then resells the property.
HUD doesn’t want to hold on to these homes too long, so they often sell them below fair market value.
Note: Availability of homes are subject to HUD accepting a bid from an earlier bid period or removing the home from the market.
[Current and previous HUD Properties for sale.]
|MD||Prince George's||Upper Marlboro||15704 Glastonbury Way||$480,000||4||2.5|
|MD||Prince George's||Accokeek||500 Dobbin Court||$330,000||4||2.5|
|MD||Prince George's||Springdale||9604 Cedar Crest Way||$297,000||4||2.5|
|MD||Baltimore||Baltimore||4621 Panacea Rd.||$235,000||4||2.5|
|MD||Prince George's||Suitland||1924 Lakewood Street||$230,000||2||1|
|MD||Baltimore||Rosedale||8302 Sagramore Rd.||$221,000||4||2.5|
|MD||Baltimore||Baltimore||1013 S Baylis St.||$200,560||3||1|
|MD||Baltimore||Owings Mills||4934 Lockard Dr.||$220,000||3||1.5|
|MD||Prince George's||Fairmount Heights||1033 58th Avenue||$180,000||3||1|
|MD||Baltimore||Baltimore||4315 Belmar Avenue||$180,000||4||1|
|MD||Baltimore||Baltimore||6 Hedgeford Court||$172,960||3||1.5|
|MD||Prince George's||Laurel||9260 Cherry Lane Unit #36||$145,000||1||1|
|MD||Prince George's||Clinton||8614 Woodyard Rd.||$130,000||3||1|
|MD||Baltimore||Parkville||1601 Melby Court||$115,000||3||1|
|MD||Baltimore||Baltimore||13 Glenmore Ave.||$110,000||2||1|
|MD||Baltimore||Baltimore||401 Middle River Rd.||$96,000||4||1|
|MD||Baltimore||Baltimore||5418 Pembroke Ave.||$85,000||3||1|
|MD||Baltimore||Baltimore||1205 N Linwood Ave.||$56,320||2||1|
|MD||Baltimore||Baltimore||2813 Hilldale Ave.||$35,000||4||2|
|MD||Baltimore||Baltimore||2582 W Fayette St.||$20,160||2||1|
|MD||Baltimore||Baltimore||3924 Ridgewood Ave. (lot)||$4,770||0||0|
Buying a HUD Home
HUD homes are foreclosed properties that are sold using a bidding process. However, you must use a HUD-approved real estate brokerage such as ASH MCGINTY to assist you with this.
There’s an offer period during which sealed bids are accepted through your agent. All offers submitted are opened at the end of that period, and HUD usually accepts the highest bid. HUD determines the highest bid based on the highest amount they will net.
If the HUD home remains unsold after the initial period, bids are then opened as they are received. During the initial offering, HUD homes are available only to those who wish to buy them as their primary residence. Investors are only permitted to bid if an owner-occupant doesn’t do so during the initial bidding process.
Benefits of Buying a HUD Home
- HUD paid closing costs up to 5% of the purchase amount, saving you thousands.
- You may be able to get up to 3% for your down payment paid.
- You can purchase quickly if you purchase a HUD home eligible for FHA-insured mortgage because it has already been appraised.
- HUD homes may be eligible for repair loans built into the mortgage.
- Preference is given to buyers purchasing a home as a primary residence over real estate investors.
HUD Closing Costs
HUD will pay up to 3% of the purchase price for your closing costs. Only certain closing costs are eligible to be paid by HUD.
Closing Costs HUD may Cover:
- Origination fee
- Home Appraisal fee
- Flood Certification
- Credit Report fee
- Home Inspection
- Recording fee
- Discount Points
- Owner Title insurance
Financing a HUD Home
All financing options are available for HUD homes, including FHA, VA, and conventional financing. If you’re buying a HUD home that needs repairs, a FHA 203k loan will allow you to include the renovation costs in the loan. Ash McGinty & Co. can help you determine what programs you might be eligible for.
Good Neighbor Next Door
Law enforcement officers, Pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.
What is HUD?
The U.S. Department of Housing and Urban Development.
Do I need a realtor to place a bid for me?
Yes, please contact us to bid on a HUD property.
How do I find a property to bid on?
See above or contact us for the most current list of available properties and to place a bid.
How can I obtain financing for my property?
Please contact us for a lender or mortgage broker that specializes in HUD Properties.
Do owner-occupants have a priority in bidding?
Yes, there is an initial owner-occupant period set aside at the beginning of the bid process.
What is the Good Neighbor Next Door (GNND) program?
The good neighbor next door program allows teachers, police officers, fire fighters and EMS personnel to purchase HUD properties that are located in a revitalization area for a 50% discount if they live in the property for 36 months.
What are my financing options?
You can use FHA or conventional financing to purchase a HUD home. You may also purchase a property with cash.
I am an investor. When can I bid on a HUD property?
During the exclusive listing period, bids may be submitted by Owner Occupants. At the conclusion of this exclusive listing priority period, all general public bids will be accepted.
Can I have the property reappraised and lower the price of the home?
In accordance with Mortgagee Letter 2010-08, a second appraisal may not be ordered simply to support a purchase price that is higher than the value on the current appraisal. A second appraisal can only be ordered to support a higher sales price if there are material deficiencies with the current appraisal. In such an instance, the Direct Endorsement underwriter is responsible for documenting and determining that material deficiencies exist with respect to the current appraisal.
Can a buyer elect to use his or her own closing agent?
The purchaser can elect to choose any closing agent. However, if the purchaser elects not to use HUD’s closing agent to perform the closing, HUD will not pay for the closing agent to conduct the closing.
What is the earnest money held for, and can I get it back?
Earnest Money is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious about wanting to complete the purchase. If the seller accepts the offer, the earnest money is held in escrow by the real estate broker or by a settlement or title company until closing and is then applied to the buyer’s portion of the remaining costs. If the offer is rejected, the earnest money is usually returned, since no binding contract has been entered into. If the buyer retracts the offer or does not fulfill its obligations under the contract, the earnest money is forfeited.
When can I complete a home inspection on the property?
All purchasers are strongly encouraged to perform a walk through inspection at or near the date of your contract acceptance and, again, immediately PRIOR to closing.
If a purchaser discovers a property condition that did not exist at the time of sale they must immediately notify HUD’s property manager of the damage. The purchaser or agent should complete the Property Damage Report and fax it to the appropriate fax number listed on the form. Reporting the damage does not guarantee the correction of the problem that has been discovered. The lack of written documentation describing property condition at contract acceptance, however, will preclude consideration for repairs or price adjustments in the event of subsequent damage. Each case will be looked at independently and a determination will be made as to whether the damage will be repaired (or not repaired) or, under some circumstances, credits given at closing.
The buyer assumes full responsibility for the property and its condition on the date of closing. HUD assumes no responsibility and will make no settlement for damages reported to HUD after the close of escrow.
Can I make repairs to the property if needed prior to purchase?
HUD properties are sold as-is with no warranty. No repairs should be performed on a property until after the new owner has taken possession of the property.
Does HUD give money for repairs to the property?
No. However, a home buyer may wish to utilize an FHA 203K streamline loan to finance repairs on the property.
How much money do I have to put down on a home?
The answer depends on the type of financing being used. For FHA financed properties, the down payment is 3.5% of the sales price.
We would love to show you any available HUD properties and to assist you on placing a bid.
Questions about HUD properties? Give us a shout.