HUD, Short Sales & Foreclosures (REO)

Buying a HUD Home

Ask about the $100 down, $2500 back at closing HUD special!!

Counseling and Education

Housing counseling agencies can give you advice about buying a home.

 -   Find a housing counselor
 -   Common questions
 -   Homeownership videos

More from HUD
 -   Mortgage glossary
 -   FHA mortgage limits
 -   HUD approved lenders
 -   HUD approved condos
 -   Healthy homes
 -   Environmental maps
 -   Energy info
 -   About appraisals
 -   Have questions about FHA?
 -   FHA questions and answers

Links to find a list of current HUD listings in our area!

The homebuying process can seem complicated, but if you take things step-by-step, you will soon be holding the keys to your own home!

Nine steps to buying a home

  1. Figure out how much you can afford
  2. Know your rights
  3. Shop for a loan
  4. Learn about homebuying programs
  5. Shop for a home
  6. Make an offer
  7. Get a home inspection
  8. Shop for homeowners insurance
  9. Sign papers

Step 1: Figure out how much you can afford

What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate. The calculators below can help, but it is best to visit a lender to find out for sure.

 -   How much home can you afford?
 -   Buying vs. Renting
 -   Home Economics

Need help with your downpayment and/or closing costs?

 -   Homebuying programs in your state

A housing counselor can help you figure out how to manage and pay off your debt, and start saving for that downpayment!

 -   Find a housing counselor near you

Step 2: Know your rights

 -   Fair Housing: Equal Opportunity for All - brochure
 -   Real Estate Settlement Procedures Act (RESPA)
 -   Borrower's rights
 -   Predatory lending

Step 3: Shop for a loan

Save money by doing your homework. Talk to several lenders, compare costs and interest rates, negotiate to get a better deal. Consider getting pre-approved for a loan.

 -   Looking for the best mortgage: shop, compare, negotiate - brochure
 -   Let FHA help you
 -   Why Ask for an FHA Loan?
 -   Learn about interest only loans
 -   Avoid Predatory Lenders

Step 4: Learn about homebuying programs

 -   Homebuying programs in your state

FHA loan programs offer lower downpayments and are a good option for first-time homebuyers.

 -   Let FHA help you
 -   HUD's special homebuying programs
 -   Good Neighbor Next Door (formerly known as Teacher/Officer/Firefighter Next Door)
 -   Hurricane Evacuees discounted sales
 -   Homeownership for public housing residents
 -   Indian Home Loan Guarantee Program (Section 184)

Step 5: Shop for a home

 -   Choose a real estate agent
 -   Wish list - what features do you want?
 -   Home-shopping checklist ? take this list with you when comparing homes
 -   Homes for sale (including HUD homes)
 -   "Fixer-uppers" - home purchase and repair programs
 -   Manufactured (mobile) homes
 -   Build a home

If you choose a home in a neighborhood with a Home Owners Association (HOA), be sure to request a copy of the HOA packet, so you can review before closing.


Step 6: Make an offer

Discuss the process with your real estate agent. If the seller counters your offer, you may need to negotiate until you both agree to the terms of the sale.

 -   Making an offer

Step 7: Get a home inspection

Make your offer contingent on a home inspection. An inspection will tell you about the condition of the home, and can help you avoid buying a home that needs major repairs.

 -   For Your Protection Get a Home Inspection
 -   10 Questions to ask a home inspector

Step 8: Shop for homeowners insurance

Lenders require that you have homeowners insurance. Be sure to shop around.

 -   Homeowners insurance
 -   12 ways to lower your homeowners insurance costs

Step 9: Sign papers

You're finally ready to go to "settlement" or "closing." Be sure to read everything before you sign!



How to Bid on a Short Sale

A short sale usually occurs when a seller can't make his loan payments because of death, divorce, job loss or other hardship. When homes are rising in value, owners can sell the house and pay back the lender. But when home values are dropping, like they are in many places today, and the owner hasn't built up much equity, that's not an option. So some lenders will accept less than the amount owed to avoid the hassle and expense of auctioning the house, providing the owner proves that he doesn't have other assets to make up what he owes.

Even with experienced people at your side, it pays to arm yourself with facts before you make an offer. Don't assume that the house is a bargain, since the owner may have bought the house at the peak of the housing cycle and may owe so much that he can only discount it to current market prices. Find out what comparable houses are selling for, whether a foreclosure notice has been filed for the property, who owns the loan or loans, and how much is owed -- you'll have to deal with them all.

The seller may eagerly accept your offer, but he isn't the final arbiter of the deal -- the note holders are. So make your offer contingent on the acceptance of the lender or lenders. Since the lenders want to know that you can back up your offer, include as much information as you can on your financial resources, as well as a preapproval letter from a lender.

Although the property may be advertised as-is, make sure the deal gives you the right to have and approve home and pest inspections by qualified professionals. Short sellers usually have given up maintaining and repairing their homes; you need to know what other expenses to expect.

Also, place a time limit on your offer -- ask your agent what is customary in your area --since lenders will sometimes drag their feet, hoping to get a better deal. Short sales rarely take a short time to complete, but you shouldn't have to wait around forever.


What you need to know when buying a Foreclosure!