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HUD Homes

I know what you’re thinking – what the heck is a hud home!  Well, HUD refers to a branch of government – The Department of Housing and Urban Development (HUD) and Hud homes are actually one of the best bargains you can find in the real estate market.

The Department of Housing and Urban Development (HUD) are responsible for a number of function and it includes another government office, the Federal Housing Administration (FHA).  The FHA’s function is to provide federal mortgage insurance to potential home owners in need of a home loan.  However, in some cases, these individuals are unable to pay off the rest of their mortgage and their homes become foreclosed.  This leads us to what a HUd home is.

A hud home is a home that has been claimed by HUD due to foreclosure.  The former homeowner exchanges home ownership to HUD in exchange of payment for the remaining balance on the mortgage.  Of course no government branch wants to own a home.  For that reason, they sell the home and this is where you come in!

The desirable thing about HUD homes are that they are appraised fairly by government inspectors.  Unlike other homes for sale, any potential repairs needed in the house will be identified.  This results in a reduction of the house price, which is adjusted to include the cost of repairs.  While you may not find many steals with HuD homes, you also won’t be ripped off - a common occurrence in the real estate game.

If you are searching for HUD homes for sale, you can find many of them on the Internet.  Still, since this is government property we are talking about, you can expect the Hud home buying process to be different from the traditional real estate process of buying a home for sale.  While you are able to use a real estate agent that has been approved by HUD to view Hud houses for sale, you will find that the home buying process to be a bit more competitive.

This is because HUd homes are sold through a bidding process.  However, unlike an auction, these bids are sealed.  Therefore, you never know what other potential homebuyers are offering for one of these homes.  As you can expect, the person with the highest bid will be awarded with the home.  Although it is preferred by Hud officials that the buyer of a HUD home for sale plans to reside in it, there are some instances where investing in a HUD foreclosure is allowed.  This is primarily due when nobody has bid on a Hud home for sale, in which HUD officials will allow individuals interested in real estate investment make a bid.