HUD Homes can be a fantastic opportunity for both owner occupied or investment properties.  A lot of home buyers are intrigued by HUD homes but to most they seem too unattainable, or the process seems too complex.  We have been able to secure HUD properties for clients at some fantastic prices, including a remodeled 1BR condo in Denver’s Capitol Hill Neighborhood that was recently purchased for $87,500 with $27,500 in instant equity!

Buying a HUD Home can be a great experience.  We recommend working with a HUD Approved Realtor.  A HUD Approved Realtor can access all HUD listings as has extensive knowledge of the online bidding process.

Department of Housing and Urban Development (HUD) residential foreclosures are available throughout the State of Colorado, and the rest of the country. The sales process for purchasing a HUD home isn’t quite the same as you’ll encounter when buying a home from an individual, so do some research before you go house shopping.

Please note, there are subtle difference State to State when buying HUD Condos or houses.  Please use this article as a reference outside of Colorado.

What is HUD?

HUD is an acronym that stands for Housing and Urban Development, a cabinet of the United States Government. It has been around since 1965 with the primary aim of ensuring smooth policy for housing and city development.

What is a HUD home?

The Federal Housing Administration (FHA) is a part of HUD, the part that provides federal mortgage insurance. If a foreclosed home was purchased with a loan insured by FHA, the lender can file a claim for the balance due on the mortgage. FHA then pays off the lender’s claim and transfers ownership of the property to HUD.  HUD then sells the home or condo.

How much do HUD homes cost?

HUD homes have an appraisal  conducted and are priced below or at fair market value based on their location and general condition. The price of a home in need of repairs is adjusted downwards to reflect the investment the new owner must make home improvements.  Buyers of a HUD Home can usually find a great deal especially if you submit an aggressive bid and there are no other bidders for the property.

Will HUD make the repairs?

HUD homes are sold as-is and already come with an Inspection Report. The new owner is responsible for all repairs and improvements so do make sure to be realistic about the costs associated with getting the home or condo back to where it needs to be.  You can, and should likely still have a Professional Home Inspection done to ensure that there are no significant issues with the home.

How do I find a HUD home?

You can sign up to receive email alerts from us the same day a HUD home or condo is listed.  Send us an email to info@360dwellings.com with “HUD Alerts” in the title and some basic information about the Colorado city, neighborhood, price range, and property features your require.

When you’ve located a home you would like to see, we can show you the property as HUD approved Realtors.

What is the process for Buying a HUD Home?

HUD foreclosures are sold using a blind online bidding process. There’s an Offer Period, during which sealed online bids are inputted into the system. At the end of that period, all offers are opened and reviewed by a HUD representative. HUD will generally accept the highest bid, or the bid that brings them the highest net amount.  If you really want the property you should submit your ‘highest and best” offer.  If you have multiple homes that stirke your fancy, then submit multiple aggressive bids and see which ones get accepted!

During the initial offering period, HUD homes are usually available only to those who wish to live in the home as “owner occupied.”  If the home remains unsold after the initial period they become available to investors.  If your bid is accepted, you will be notified within a day or two. You will be given a settlement date, usually 30-60 days from the date of your accepted contract.  This can vary based on which Title Company is handling the transaction.

How do I obtain financing for a HUD Home or Condo?

If you are buying as an investor you will need to put 20% down and likely go with conventional financing.  Owner occupied deals can use FHA Financing in most cases with as little as 3.5% down.  FHA Financing offers low down payments, competitive interest rates, and flexible credit when qualifying.  Check with a quality lender to review the best options for your situation.

Hopefully you have learned a lot about the HUD process for buying Real Estate. Feel free to contact a HUD Approved Realtor for more information.