Q. How much money do I have to put down on a HUD or Repossessed home?
A. That would depend on the requirements of the seller, the listing office, or the lending institution you use. You need to find that out before bidding on a HUD home.

Q. Can I bid on the homes myself?
A. No. HUD requires that all bids must be submitted thru an authorized HUD broker. We are an authorized, licensed HUD electronic bidding office. 

Q. What is a short sale?
A. A short sale is when your mortgage lender will take less money than you owe for your mortgage.

Q. What is a "deed in lieu of foreclosure?"
A. This is when you offer to give up all rights to the property to your lender rather than go thru the foreclosure process.

Q. What about repairs required by the city?
A. You should obtain the inspection report and review it prior to your offer.  Normally the City will require you to repair (at your own expense) all defects listed on their City Property Inspection Report before you occupy the premises and require you to have the repairs inspected and approved prior to issuing you a Certificate of Occupancy.

Q. What is a HUD Home?
A HUD Home may be a single-family house, a town home, condominium or other type of residence. The properties were deeded to HUD/FHA by mortgage companies who had foreclosed on FHA-insured mortgage loans. Now HUD must sell these homes—as quickly as possible at market value—in order to obtain the maximum financial return on its mortgage insurance funds.

Q. Who can buy a HUD Home?
A. Anyone who has the money or can qualify for the necessary amount of mortgage financing can purchase a HUD Home. You do not have to be low-income or meet any other such limitations.

Q. Can I get a HUD Home for free, or for one dollar?
A. No. HUD acquires its properties through the foreclosure of FHA insured mortgages. One of HUD's many missions is to maximize return to the FHA insurance fund, which it does by selling the properties at fair market value.

Q. How do I buy a HUD Home?
A. Our policy is to market acquired properties on a competitive basis with offers being submitted through any participating licensed real estate broker. Local brokers will assist you in the transaction. They can show the property to prospective buyers, as well as answer questions and provide information on the location of parks, schools, shopping, and employment centers.

Q. Are HUD Homes meant for low income people?
A. HUD Homes come in a variety of price ranges, though most are affordably priced, making them accessible to low and moderate income Americans. What are the income requirements? If you make a cash purchase, there are no income requirements. Otherwise, you must be able to qualify for a particular type of mortgage financing based on established mortgage lending criteria (see page 3).

Q. How does HUD decide how much to charge for a HUD Home?
A. The listing price of a HUD property is a price based on the appraised value.

Q. Can investors purchase HUD Homes?
A. Yes. However, HUD offers its properties to owner/occupants for a period before making them available to investors.

Q. What happens if I can't close the sale within the time permitted by HUD?
A. You'll probably have to pay fees for an extension of time, usually in increments of 15 days.

Q. Is there any way for me to get advanced notice about homes that will be coming up for sale?
A. No. HUD Homes are listed for sale in the local multiple listing service (MLS), the Internet at www.hud.gov or ask your broker.

Do you have a question for the Broker? If so you may submit  your question here!

TERMS YOU NEED TO KNOW.

Adjustable Rate Mortgage (ARM). A type of mortgage rate loan whose interest rate changes periodically up or down, usually once or twice a year.

Annual Percentage Rate (APR). Everything financed in your mortgage loan package (interest, loan fees, points or other charges) expressed as a percentage of the loan amount (usually slightly above the actual interest rate alone).

Assumable Loan. A loan in which the lender is willing to “transfer” from the previous owner of the home to the new owner, sometimes at the same interest rate, sometimes at a new rate. An assumable loan can make your home more attractive to buyers when you want to sell.

Closing Costs. Costs the buyer must pay at the time of closing in addition to the down payment: including points, mortgage insurance premium, homeowners insurance, prepayments for property taxes, etc. Closing costs average 3 percent -4 percent of the loan amount. If you're buying a HUD Home, you can request they be paid by HUD, if the sales incentive is offered.

Contingency. A condition put on an offer to buy a home; such as the prospective buyer making an offer contingent on his or her sale of a present home.

Conventional Mortgage. A type of mortgage not insured by either the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), and thus usually requiring a 10 percent - 20 percent down payment. (HUD Homes may be purchased with a conventional mortgage.)

Earnest Money. Funds submitted with an offer to show “good faith” to follow through with the purchase. Earnest money is placed by the broker in an escrow/trust account until closing, when it becomes part of the down payment or closing costs. (HUD generally requires an earnest money deposit of $500-$2,000.)

Escrow. A procedure in which documents or transfers of cash and property are put in the care of a third party, other than the buyer or seller.

FHA Financing. Financing for a loan which will be insured against loss by the Federal Housing Administration—a part of the U.S. Department of Housing and Urban Development (HUD). Such financing allows for a lower down payment than required by most lenders.

Homeowners Insurance. Insurance that protects the homeowner from “casualty” (losses or damage to the home or personal property) and from “liability” (damages to other people or property). Required by the lender and usually included in the monthly mortgage payment.

Loan Origination Fee. A fee charged by the lender for evaluating, preparing, and submitting a proposed mortgage loan.

Mortgage Insurance Premium (MIP). A charge paid by the borrower (usually as part of the closing costs) to obtain financing, especially when making a down payment of less than 20 percent of the purchase price, for example on an FHA-insured loan.

Point. An amount equal to one percent of the principal amount being borrowed. The lender may charge the borrower several “points” in order to provide the loan.

Property Taxes. Taxes (based on the assessed value of the home) paid by the homeowner for community services such as schools, public works, and other costs of local government. Paid as a part of the monthly mortgage payment.

Title Insurance. Protects lenders and homeowners against loss of their interest in property due to legal defects in the title.

VA Loan. A loan guaranteed by the Department of Veterans Affairs against loss to the lender, and made through a private lender. (HUD Homes may be purchased with a VA loan.)