In the real estate market there are many different programs, set up by different lenders, which a potential homeowner can use to get into a home. The government has its programs as well, which are in place to help potential homeowners who may have financial difficulties. The Federal Housing Administration is one of these, and the U.S. Department of Housing and Urban Development (HUD) is another. These two programs are there to help people get into homes, and to handle any real estate that the governments acquires possession of if a loan becomes delinquent and a home is foreclosed on. Depending on where you are at in the home buying process, both of these programs may work to your advantage when purchasing your home.
FHA Foreclosure Homes
An FHA home is a property that was acquired by the homeowner using a loan which was secured
by the federal government, meaning the government has insured the loan so the lender carries
less risk. Many people are able to get into a home using the help of the Federal Housing
Administration. Unfortunately, no matter how hard people try, sometimes the finances go belly
up and the home ends up in foreclosure. When a federally insured home is foreclosed on, the
control of the property goes to the Department of Housing and Urban Development, otherwise
known as HUD. These properties are then sold by the government in an attempt to regain some
of the funds that were lost, becoming Federal Housing Administration foreclosure homes.
With the economic drop that occurred a few years ago, many people found that they were unable
to pay their mortgage payments. As a result, the homes were foreclosed on and HUD acquired a
lot of property in a very short time. These homes could be found everywhere. The economy has
now stabilized a bit, but there are still thousands of homes across the nation that have not been
sold or that are being foreclosed on. Typically a home being sold by this government department
is put on at fair market value. If they don’t sell, prices can drop and drop. As a potential
homeowner, you don’t want to turn away from one of these homes because they can be a great
deal for a house. This is the biggest appeal these homes have to offer for homeowners and
investors alike – they are often sold at prices that you wouldn’t find elsewhere. While this isn’t
always how it turns out, it happens often enough that they are worth looking into, just in case.
Finding a HUD Home
Because these homes are controlled by the government, the best place to look to locate the
homes in your area is through the government website*. FHA homes which have gone through
foreclosure can be found in the listings that come up after you input the search terms that you are
interested in. If you would rather browse the listings instead of putting in requirements, you can
click on the state you are interested in and go through the homes that come up. The website
provides pictures, price, number of bedrooms, etc. It also has icons that indicate whether a home
is new or whether the price has been reduced. It’s a quick, easy resource for finding the homes
listed in the area you’re looking to purchase in.
If you find a home that appeals to you, you’re going to want to make sure you visit the property
to give it a good inspection. One of the downfalls to purchasing a home sold by the government
is that the property will be sold as is. If there are major repairs that need to be done on the home,
you will be required to handle that on your own. Sometimes financing will be available to help fix up the home, but that isn’t always the case and will need to be discussed with your lender.
Because these are foreclosure homes, it is not uncommon for them to be in need of a little TLC –
families that leave the home because they can’t make payments typically lose their motivation to
keep the home in good repair.
In the end, purchasing a home that has been foreclosed on may not work for you, but the reduced
price of a lot of these homes have been the way for countless numbers of people to become
homeowners on a lower budget. When you’re looking to buy a home it’s best to consider all of
your options – both traditional and government – because you never know which option will be
the one that works for you.