Buying a HUD Home - Part 1 - BUYER INCENTIVES

Now that we have discussed what a HUD Home is and what it is not, now it's time to let you in on how you can purchase a HUD owned property.

First and foremost, purchasing a HUD Home is not a whole lot different than purchasing any other property,  There are some differences in the initial offer process and their are many incentives that are available for purchasers. 

Let's look at the incentives that are available from HUD.

Good Neighbor Next Door

On many HUD owned properties, HUD offers an incentive to Police Officers, Firemen, Emergency Medical Technicians and Teachers.  The properties that qualify for the Good Neighbor Next Door Program are generally in economically disadvantaged areas. 

A prospective buyer who works in one of the qualifying fields is eligible for a 50% discount from the list price as an owner occupant purchaser.

• The purchaser must be lender qualified at the list price of the property.
• The purchaser must be an owner occupant
• Must live in the property for a minimum of five years after the purchase of the property.
• Must NOT have previously purchased a property under the Good Neighbor Next Door program

$100 Down

Must HUD owned properties are eligible for a down payment of $100.  The purchaser must obtain FHA financing and be an owner occupant.

Repair Escrows

Many HUD owned properties have a repair escrow.  When a property requires less than $5000 worth of repairs to qualify for FHA financing, HUD will offer a repair escrow to correct items that will allow the property to obtain FHA financing.  Repair escrows are permitted only with FHA financing.  The escrow amount is added to the purchaser's mortgage.  The purchaser must perform the repairs after closing and the escrow amount or actual amount of the repair, whichever is less, is released by the lender after the repairs are complete.  Repair escrows are only offered with FHA financing are properties  that are listed "Insured with a Repair Escrow (IE)" and are only available to owner occupants.

As you can see there are a myriad of buyer incentives available to owner occupant purchaser's.  Bo Evans Realty uses their twenty years experience in the sale of HUD owned properties to assure that their purchasers understand and are able to use every incentive that may be available to them.  Give us a call at 1-800-209-4843 or email boevans@knology.net for more information.

What is a HUD House

A "HUD Home" is a property owned by the United States Department of Housing and Urban Development (HUD).  HUD acquires the property through foreclosure of an FHA insured mortgage.  FHA is a publicly funded mortgage insurance program which allows purchasers to buy a home for a lower down payment than conventional financing.  The mortgage insurance premium (MIP) is paid up front and closing and the premium is renewed annually, this is generally collected in the owner's monthly mortgage payment.  There are strict limits on the loan amount for an FHA mortgage and these limits differ based on the location of the property.  In Alabama most areas have an FHA loan limit of $271,050 for single family properties.  This link provides the limits in Alabama by county for one to four unit properties.

When a lender forecloses on an FHA mortgage, they have the opportunity to make a claim on the insurance, FHA pays the lender the amount of the claim and the property is conveyed to HUD.  HUD then will perform maintenance and repairs as needed to protected the security and safety of the property and will obtain an appraisal, HUD will assign the property to a Marketing and Management (M&M) contractor who will then assign the property to a Neighborhood Listing Broker (NLB), currently there are three M&M contractors in Alabama, each of them contract for services with dozens of NLB;s throughout the state, any registered real estate licensee in Alabama can sell a HUD property. 

It is very important that a buyer and their agent understand the process for purchasing a HUD owned property, these steps will be detailed in future posts.  Bo Evans Realty has twenty years experience in the sale of HUD owned properties throughout the state and is uniquely qualified to assist buyers in this process.

What a HUD Home is NOT
HUD Homes, while having the potential for being excellent deals for buyers, there are many things that they are not:

• HUD Homes are not rental properties
• HUD Homes are not homes for buyers who cannot otherwise purchase a home, although some excellent buyer incentives exist for home purchasers.
• HUD Homes are not "rehab" homes.
• HUD Homes are not meant to be investor properties, although they can be excellent opportunities for investors in some circumstances.
• HUD Homes are not auction properties.
• HUD Homes are not a first time buyer program.

Want to know more about HUD Homes?  Give us a call at 1-800-209-4843 or email boevans@knology.net

HUDHomestore.com: Property Search Result - AL

This email contains a set of links to the first 10 HUD Homes that meet your defined alert criteria. Please use this link to view the complete results for this search.   Case Number: 011-573001 Property Information Address 1530 6th Ave N Bessemer, AL, 35020 Jefferson County Appraisal Date 04/22/2013 Bed/Bath 4/2.00 Total Rooms 7 Parking Driveway Square Feet 2530 Year 1917 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders All Bidders Bid Submission Deadline Daily at Midnight CT Bid Submission Time Remaining 8 Hours 58 Minutes List Price $18,830.00 As-Is Value $26,900.00 FHA Financing UI (Uninsured) 203K Eligible Yes Escrow Amount $0.00 Repair Escrow $0.00

Case Number: 011-634340 Property Information Address 2611 Brookline Dr Huntsville, AL, 35810 Madison County Appraisal Date 08/02/2013 Bed/Bath 3/1.50 Total Rooms 5 Parking Carport Square Feet 1139 Year 1962 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders Nonprofits and Government Agencies Only Bid Submission Deadline 8/15/2013 11:59:59 PM Bid Submission Time Remaining 6 Days 8 Hours 58 Minutes List Price $28,000.00 As-Is Value $28,000.00 FHA Financing UI (Uninsured) 203K Eligible Yes Escrow Amount $0.00 Repair Escrow $0.00

Case Number: 011-604544 Property Information Address 141 Cherokee Terrace Ln Greensboro, AL, 36744 Hale County Appraisal Date 07/31/2013 Bed/Bath 3/1.00 Total Rooms 5 Parking Carport Square Feet 1159 Year 1973 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders Nonprofits and Government Agencies Only Bid Submission Deadline 8/15/2013 11:59:59 PM Bid Submission Time Remaining 6 Days 8 Hours 58 Minutes List Price $24,000.00 As-Is Value $24,000.00 FHA Financing UI (Uninsured) 203K Eligible Yes Escrow Amount $0.00 Repair Escrow $0.00

Case Number: 011-623761 Property Information Address 1188 Culver Road Falkville, AL, 35622 Morgan County Appraisal Date 04/25/2013 Bed/Bath 3/2.00 Total Rooms 7 Parking Driveway Square Feet 1835 Year 1952 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders All Bidders Bid Submission Deadline Daily at Midnight CT Bid Submission Time Remaining 8 Hours 58 Minutes List Price $44,800.00 As-Is Value $64,000.00 FHA Financing IE (Insured Escrow) 203K Eligible Yes Escrow Amount $1,925.00 Repair Escrow $1,925.00

Case Number: 011-558453 Property Information Address 20960 Walnut Lane Vance, AL, 35490 Tuscaloosa County Appraisal Date 08/04/2013 Bed/Bath 3/2.00 Total Rooms 5 Parking Garage Square Feet 1296 Year 2004 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders Owner Occupants, Nonprofits, and Government Agencies only Bid Submission Deadline 8/18/2013 11:59:59 PM Bid Submission Time Remaining 9 Days 8 Hours 58 Minutes List Price $112,000.00 As-Is Value $112,000.00 FHA Financing IE (Insured Escrow) 203K Eligible Yes Escrow Amount $880.00 Repair Escrow $880.00

Case Number: 011-723080 Property Information Address 413 Stone Park Blvd Pike Road, AL, 36064 Montgomery County Appraisal Date 08/06/2013 Bed/Bath 4/2.00 Total Rooms 7 Parking Carport Square Feet 1924 Year 2011 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders Owner Occupants, Nonprofits, and Government Agencies only Bid Submission Deadline 8/18/2013 11:59:59 PM Bid Submission Time Remaining 9 Days 8 Hours 58 Minutes List Price $172,000.00 As-Is Value $172,000.00 FHA Financing IN (Insured) 203K Eligible No Escrow Amount $0.00 Repair Escrow $0.00

Case Number: 011-605468 Property Information Address 6409 Maryknoll Dr Mobile, AL, 36695 Mobile County Appraisal Date 08/01/2013 Bed/Bath 4/2.00 Total Rooms 7 Parking Driveway Square Feet 2070 Year 1963 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders Nonprofits and Government Agencies Only Bid Submission Deadline 8/15/2013 11:59:59 PM Bid Submission Time Remaining 6 Days 8 Hours 58 Minutes List Price $115,000.00 As-Is Value $115,000.00 FHA Financing UI (Uninsured) 203K Eligible Yes Escrow Amount $0.00 Repair Escrow $0.00

Case Number: 011-517278 Property Information Address 710 Bellwood Rd Enterprise, AL, 36330 Coffee County Appraisal Date 04/29/2013 Bed/Bath 2/2.00 Total Rooms 6 Parking None Square Feet 1681 Year 1925 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders All Bidders Bid Submission Deadline Daily at Midnight CT Bid Submission Time Remaining 8 Hours 58 Minutes List Price $12,150.00 As-Is Value $15,000.00 FHA Financing UI (Uninsured) 203K Eligible Yes Escrow Amount $0.00 Repair Escrow $0.00

Case Number: 011-616896 Property Information Address 6710 Alexandria Leigh Cir Theodore, AL, 36582 Mobile County Appraisal Date 05/30/2013 Bed/Bath 4/2.00 Total Rooms 7 Parking Driveway Square Feet 1553 Year 2009 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders Owner Occupants, Nonprofits, and Government Agencies only Bid Submission Deadline 8/13/2013 11:59:59 PM Bid Submission Time Remaining 4 Days 8 Hours 58 Minutes List Price $79,000.00 As-Is Value $79,000.00 FHA Financing UI (Uninsured) 203K Eligible Yes Escrow Amount $0.00 Repair Escrow $0.00

Case Number: 011-497043 Property Information Address 1152 14th Place SW Birmingham, AL, 35211 Jefferson County Appraisal Date 06/29/2013 Bed/Bath 3/1.10 Total Rooms 6 Parking Garage Square Feet 1476 Year 1950 Property Design HOA Fees $0.00 Listing Information List Date 08/09/2013 Eligible Bidders All Bidders Bid Submission Deadline Daily at Midnight CT Bid Submission Time Remaining 8 Hours 58 Minutes List Price $7,000.00 As-Is Value $7,000.00 FHA Financing UI (Uninsured) 203K Eligible Yes Escrow Amount $0.00 Repair Escrow $0.00

Welcome

Bo Evans Realty is proud to present our newest technology addition, Alabama HUD properties.  Our mission is to provide consumers with information about HUD owned properties in Alabama including how to purchase a HUD owned property, special incentives from HUD for buyers, regular updates on HUD Listings in Alabama and other useful information.

Your questions and comments are always welcome.

click here for a full listing of HUD Homes for Sale in Alabama HUD HOMES FOR SALE

Stay tuned for regular updates.