Chapter 10 HUD Flashcards
HUD
Housing and Urban Development was created to fight the lack of home ownership and poverty in the US
Who runs HUD
Run by a Secretary appointed by the US President.
FHA which was created in 1934 is managed by HUD.
FHA
Mortgage Insurance program FHA allows it
FHA
Fair Housing Act passed in 1968. It oversees the majority of the residential market and bars discrimination based on skill color, race, religions, national origin, martial status, age or disability.
What are HUD homes
HUD are homes that have been foreclosed and first purchased with FHA loans. HUD sells are below market prices.
HUD Assistance and Home Buyer programs
HUD offer several types of incentives that include vouchers, grants and buyer
Section 8
Housing Choice Voucher program allows families with low income, seniors and those with a disability to obtain home ownership by offering them regular subsidy in terms of vouchers
One dollar program
Allows to buy HUD homes that have been on the market for more than 180 days. These home only cost $1
The Good Neighbor Next Door Program
Assist public servants like law enforcement officers, teachers, fire fighters and emergency medical personnel purchase homes by offering them 50% of the purchase price.
Non Profit programs
It permits religious non profit to purchase HUD homes with 30% discount.
HUD $100 Program
It makes it easy for some people to own a home by just making $100
What to expect with a HUD home
Eligibility: Primary resident
Buyer should not have bought another house within 24 hours.
Buyer will remain resident for the 12 months
Location of homes
HUD homes are not listed on the usual MLS. They are listed on hudhomestore.com
Where are HUD homes sold?
Sold at private auctions. One has to hire a HUD approved real estate agent
How to bid
Potential buyers are allowed to make bids over a 30-day period. Buyer are given 30-60 days to close
HUD home financing
All traditional loans secured.
FHA 203(k).
HUD properties need significant repairs and renovation to make them habitable.
The Pros of Purchasing a HUD home
Affordable due to low price.
Prefer home owners to investors. Investors are rarely given property.
Assisting with closing costs.
HUD offers upto 5% of the home price to pay for closing costs.
Low down payment
The Cons of Purchasing HUD Home
Need to HUD approved agent.
As is
Residency requirements 12 months. Buyer is not allowed to buy another HUD home for at least 24 months after the first purchase.
What exactly is HUD home
Purchased with FHA Insured mortgage. Previous homeowner fails to repay the mortgage.
Qualifications
Any individual who can obtain financing for a HUD home is eligible to bid on the property.
Assistance from a HUD registered real estate agent is needed to make a bid. The Property remains on the auction list for 30 days.
