How To Qualify for a HUD Home

how do i qualify for a hud loan

A HUD home is probably one of the cheapest houses you can buy in real estate. It is because they are 1 to 4 units of residential houses that were foreclosed by the Federal Housing Administration (FHA) for failing to pay FHA-insured mortgage. Most HUD homes are single family dwellings that you can view in the HUD homes websites like hud.gov. Many of these homes are still in the best condition so coming in cheap would be the best bargain for your hard earned money. If you are looking to buy HUD homes for your family, bear in mind that you have to qualify for it first. Not everyone can buy a HUD home easily. There are some things you should consider. Here is how to qualify for a HUD home, read on.

  • You should know that HUD does not directly provide the HUD home financing. Your loan should be from a mortgage lender or if you have ready cash reserves. Another loan you can avail would

    be applying for a FHA-insured mortgage.

  • Make sure you have money for initial payments. You would need to pay for a down payment and a deposit which they call “earnest money deposit.” An earnest money deposit will vary. It can sometimes be as affordable as $500 depending whether the property you are aiming for is qualified for FHA financing. The usual down payment is around 5% to 20% but if you’re pre-qualified for the financing, it can go down to 0% or 5%.

    There are special considerations given to people who have lost homes due to natural calamities like earthquakes or floods. Applicants who were displaced by hurricane Katrina have special discounts when they purchase a HUD home.

    Once your bid is accepted, expect a notification by the FHA accredited broker you hired in the next 48 hours. You should close the deal within 2 months or your bid would be removed from the bidding and the house will be sold to the next bidder. Good luck!

    Source: www.howtodothings.com

    Category: Credit

    Similar articles: