Wanting to Buy a HUD or VA Foreclosure?
We have 14 Tips for Purchasing HUD or VA Foreclosures!
If you are looking at HUD or VA foreclosures, these homes were at one time backed by federal government. For homes that had FHA mortgages default, they are owned by the Department of Housing and Urban Development (HUD). For homes that had VA loans, their foreclosures are owned by the Department of Veteran’s Affairs.
If a homeowner quits paying the mortgage on either of these two types of loans who made the loan forecloses on the property, and either HUD or VA pays off the lender, as they insured the property loan.
If you want to buy a HUD or VA property, you need to do some research. Here are 14 great tips to go by if you are looking to go this route.
If you are seeking to purchase a HUD or VA foreclosure, you will:
- Buy the VA or HUD home “As is”. No exceptions.
- Utilize the services of a HUD registered or VA qualified real estate broker.
3. Get pre-approved for a mortgage and/or show you have cash to close the transaction.
- Give earnest money to your real estate broker in the form of a money order or cashiers check before making a bid on either a VA or HUD home.
If you are making an offer on a HUD Home:
- Although it is a HUD home, you do not have to get FHA financing.
- You will get priority if you are looking to occupy the HUD home rather than invest in it.
- You can get three types of financing on HUD properties from the government: FHA insurable homes; FHA insurable homes with a repair escrow; and, homes that are uninsurable with an FHA loan.
- HUD can escrow a portion of the sales price to bring the home up to FHA standards for an Federal Housing Administration (FHA) loan.
- A HUD buyer needs to make the earnest money check out to their HUD registered broker’s company.
- If a property is $50,000 or less, HUD requires a $500 earnest money deposit. If the property is over $50,000, HUD requires $1,000.
If you are seeking to purchase a VA foreclosed home:
- The VA property code will determine how a buyer can finance the property.
- VA can do “VA Vendee Financing” which is a way to do a form of seller financing.
- You do not have to be a veteran to qualify for VA Vendee financing.
- You will be required to place a minimum of $1,000 down and the deposit is non-refundable with the only exception being if the buyer is unable to obtain financing.
If you are looking for expert advice in purchasing a HUD or VA forclosure, feel free to contact us by calling 615-474-2808, or just fill out the form below and we will contact you!