A HUD Home is the outcome of a foreclosure on an FHA (Federal Housing Administration) Home Loan. FHA Loans are federal assistance, and have generally allowed lower income Americans to borrow money for the purchase of a home. In some markets, the general sales for HUD homes have increased as much as 13% in 2012.
When a homebuyer with an FHA insured mortgage is unable to make the payments, the lender forecloses on the home. FHA pays the lender what is owed on the home, and the United States Department of Housing and Urban Development (HUD) takes full ownership of the home. Anyone who qualifies for a mortgage or pays cash can buy a HUD home, but only owner-occupants can take advantage of the $100 Down Payment Program. Owner-occupants must live in the house as their primary abode for at least 1 year and may not purchase another HUD home for 2 years. You can request that HUD compensates at least 3% of your closing costs.
One of the best advantages that comes with buying a HUD home is that government guarantees that the title is clean. Unlike an auction you can actually visit the property and see what you are buying. HUD homes are sold
“As-Is”, “Where Is”, without warrant, and will not pay for any repairs. HUD homes are also able to be financed, which is another great benefit to purchasing a home. HUD pays for the process of purchasing homes by using one of their contracted attorneys. That being said, you can get the benefit of not having to pay for regular costs of attorney fees.
The number of HUD Foreclosed homes in the Metro Atlanta area have dramatically increased over the past few years. With the number of HUD homes available on the Metro Atlanta market, buyers have the potential to take advantage of these opportunities.