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Questions about buying a hud home?

My husband and I want to purchase a home through FHA. We qualify and have money to put down. So far we haven't had much luck in finding what we want. I'm not being picky. I don't care about cosmetic flaws. Just want a certain number of bed, bath and garage, etc. There is a hud home that opened up in our area. It looks like it might be something we would to look at. My realtor keeps telling me that she doesn't advise showing us foreclosures or hud homes cause they are usually nothing but problems and most of the time FHA will not approve them. Yet I keep reading that they can be a great opportunity. If we were to look at this home, would we bid on it first and then if approved, get an inspection? How does the process work? I know the realtor has to be registered and I'm guessing mine isn't. Is it worth checking out? Thanks!!

Public Comments

1. HUD homes can be a great buy. HUD usually has a Home Inspection done on the home before they list it. You can view the inspection online. You still want your own home inspection done, but you are correct, that would be after getting your offer accepted. Your broker does not have to be registered with HUD if they co-broke with a HUD registered Broker. If your agent does not want to show you these properties, you need to find another agent. HUD homes are worth checking out. You can check out all HUD homes in your area on the HUD web site at; http://www.hud.gov/homes/index.cfm as well as get a lot of information to aid you.
2. That depends - is the house approved for FHA financing? Many foreclosed homes are not in a condition to obtain FHA or VA financing on them. There are FHA 203K loans which allows repairs to rolled in (up to about 30K if the appraisal supports it). FHA and VA have guidelines that require certain things to be in working order. So, yes there are great deals out there and if they work for you definitely look at them. Keep in mind that most of the best deals will not go FHA or VA, in extreme cases some can only be purchased with CASH! It isn't the agents but the brokerages that have to be registered with HUD. Your agent's broker might not be listed with HUD or the agent may not be familiar with the HUD bidding process since HUD homes haven't been that active in recent years. Be honest with your agent that you want to look at this HUD house and you want them to show it you. Ask them to refer you to someone who can handle HUD transactions if they cannot.
3. We bought a Hud foreclosure 12 months ago. Check out www.hud.gov for listings in your area and answers to your questions that is where we found our home. Hud will show you the listing agent, who represents their foreclosures in your area and they can help you with the showing. HUD inspects the homes ahead of time and ours was so thorough that we waived inspection. They also pay someone to come in regularly to make sure the property is in order while listed. You do have to agree to live in it for a 12 month period, but other than that they make it a really easy process. During closing the HUD closing agent over and over again advised us on how to maintain our conventional mortgage,how have it reappraised for lower taxes, how to access equity, and was so careful to make sure we knew what we were doing and that we were ok with the process. Have owned several homes and this one was best process ever. Plus, it is a newer move in ready home in great shape and because HUDs are priced lower we moved in with 18% equity over our dp. It was a great choice. And although someone will make a disagreeing remark to this, I felt much safer going with the government on this.