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Ok, so it’s 2am and you can’t sleep.  You are flipping through mindless and endless infomercials trying to figure out why the sandman has not visited your home and you come across a commercial that says “BUY A HUD HOME FOR $1 – JUST SEND US $19.95 for a complete list of listings!”  Ok, it sounds too good to be true, you figure $19.95 is not that much to spend and I was thinking I am ready to purchase home!

Let me save you the money and explain to you a little about HUD homes.  There is no special list and there are homes available for a special price but buying a HUD home for $1 is a way to catch your attention and if there is one, believe me, it is only for a special group of people or organizations.

HUD homes are an excellent way to purchase your first home, heck you can even buy a HUD home if you have purchased before.  HUD’s are usually FHA approved which means you can obtain a loan with only 3.5% down.  And in some areas, HUD runs a wonderful incentive for buyers by offering only $100 for the downpayment.  Be aware, that program is not in all states and areas but it is out there!  I  have closed quite a few!  But I digress….HUD homes are generally a good value, most of the time they are priced a little lower than the value in the area, but if it’s been on the market a while and they have lowered the price a few times, you have magically walked into a bit of equity! (NICE PERK)

What is the difference between a HUD home and a foreclosure.  Not much really…a HUD home is a home that was financed by a government loan and if someone lost a home, they buy it back from the lender so it becomes a government home.  Foreclosures are generally, not not always, homes purchased with a conventional loan.

Buying a HUD is a bit different.  There is a bidding period.  You will need a registered real estate agent to perform the process for you. (Shameless plug….contact me at Laura.A.Key@gmail.com) You do not know how many bids are in the system and once the bidding process is done and you are determined the winner, you will be on a timeline to get the paperwork into the correct people. 

But Laura, my Realty Goddess….what about the $1 HUD homes?  There are special programs out there to help non-profits and special people who serve our community.  The $1 homes (if any) are usually presented to the non-profits.  The special programs are usually offered to the following: Police Officers, Teachers, EMT’s and Firefighters.  Those homes are won on a lottery bidding system.

*This ends Part 1 of “Thinking of Buying a HUD Home” tune in to the next episode where we will discuss the bidding progress and steps to closing the deal.

Contact me with any questions you may have! Laura.A.Key@gmail.com

www.KeyCaliforniaHomes.com

*By Laura Key, please do not use without permission.