Hud Homes are an exciting way to buy your home. The list of HUD Homes is continually updated. HUD Homes are loans that were defaulted that were insured by HUD. The houses are sold as is. Typically the houses require some repairs to bring them into loanable condition. These houses are sold through a bid process. If you finance your HUD Home through an FHA loan you pay $100 down plus the closing costs. If the repairs are under $5,000 a traditional FHA loan will escrow the repairs. If the repairs are between $5,000 and $30,000 HUD offers a streamlined renovation loan. Properties requiring over $30,000 in repairs require a renovation loan. The renovation loan projects, over $30,000 are very difficult to finance. FHA credit guidelines are more liberal than traditional lenders. HUD also has a special program for law enforcement, educators,fire fighters and emergency medical technicians. The program is called the Good Neighbor Program. If you are interested contact us for more information.
The steps to successful HUD Home Ownership:
- Get a copy of your credit report
- Look for late payment or derogatory credit
- Report to the credit agencies mistakes
- Gather w-2's and tax records for past 3 years.
- Select a qualified HUD lender. I can help you select one.
- Get a pre-approval letter.
- Have funds for the closing costs. Your lender will tell you about these.
- Now the fun part starts. Let's start looking for your new HUD Home.
- We find your dream home.
Your FHA Loan Checklist
To get your FHA loan processed smoothly you will need to present this information to your lender.
- Social Security Numbers
- Addresses for past two years
- Names and addresses of employers for past two years.
- Gross Monthly salary at your current job(s)
- Copy of check stubs and W-2 forms for the past two years
- Copies of personal returns for the past two years
- Information for all checking and savings accounts
- Information on all open loans
- Complete information for other real estate you own
- Approximate value of all personal property
I have attached below several useful items. These are links to other websites. 1) House Payment Chart 2) FHA Credit Guidelines 3) FHA Streamlined Repair Guidelines. 4) FHA Debt Ratio Guidelines. Above also is the link to the official HUD website to search for your new HUD Home.
FHA appraisers are looking for:
- Functional roof that doesn’t leak.
- Good foundation
- Working furnace, water heater
- Functional flooring over 80% of the floors.
- Water resistant flooring in the bathroom
- Electrical outlets every 12′ around each room
- GFCI controlled outlets within 6′ of any water faucet: near kitchen sink, near bathroom sink.
- No exposed wiring. No holes in the walls and ceilings.
- Plumbing that is up to code: has a vent stack pipe for the bathroom and kitchen. (Or at least up to the code when it was built or updated.)
- Electrical wiring that is up to code. (Or at least up to the code when it was built or updated.)
- Vent fan in the bathroom to avoid mold.
- Railings for the stairs that are a certain height (32″). Railings around decks that are over 30″ above the ground at 42″ height.
- Railings that have balusters that are no more than 4″ apart, to avoid children getting their heads stuck between them.
- They might look for windows and doors that seal.
- Dry basement
