Frances Flynn Thorsen is the author of HUD Homes For Sale — A Complete Buyer’s Guide and HUD Homes For Sale — A Sales and Marketing Guide For Real Estate Agents.
I have extracted her explanation of what a HUD home is:
“ A HUD home is a property that has been lost by a previous owner in
foreclosure or a property that an owner has given back to the lender
with a deed in lieu of foreclosure. Property owners facing financial
difficulties are sometimes unable to keep up with mortgage payments. In the
case of HUD homes, the property owner is a person who obtained an FHA
mortgage to purchase or refinance the property as a principal residence.
A lending institution, such as a mortgage company, bank, savings and
loan association, funds the mortgage loan; the Federal Housing Administration
(FHA), an agency that is part of the U.S. Department of Housing and Urban
Development (HUD), insures the mortgage. The mortgage insurance protects the
lender from financial loss in the event the borrower defaults. When an FHA
homeowner defaults on FHA loan and the bank takes the house back in
foreclosure, the lender has two choices about the disposition of the property. The
lender may decide that there is sufficient equity in the house to turn a profit; it
may keep the property and sell it as part of its Real Estate Owned (REO)
inventory. Or, the lender may “cash in” on its FHA insurance policy and turn the
property over to HUD. HUD adds the property to its pool of properties in the
HUD Homes For Sale Program.
HUD’s regional Marketing and Management (M&M) Contractor
prepares the property for sale and markets the home according to HUD
guidelines. HUD is presently the single largest owner of single-family homes in
the country.”
The more I learn about HUD homes and the programs available the better I can serve my clients, and I think HUD homes are a great opportunity for buyers, specially when combined with FHA 100 dollar down loan program. If you want to buy a HUD home you need to work with a Real Estate professional who is authorized to sell HUD homes. I am always happy to help.
“ Dare to Dream”
Piccola Dowling
Real Estate Consultant
Long Realty Company
piccola@longrealty.com
