Established in 1965, the U.S. Department of Housing and Urban Development works to promote community development. More commonly known as HUD, the department’s mission is simple: Create suitable and affordable housing.
HUD encourages homeownership, and plays a vital role in helping low-income and middle-income families purchase a home. Additionally, HUD has programs to promote economic growth and increase job opportunities within communities.
The U.S. Department of Housing and Urban Development supports a variety of mortgage and housing programs. Through the department, homebuyers can obtain mortgages insured by the Federal Housing Administration (FHA). This allows individuals with lower credit scores to qualify for mortgages at competitive rates, plus pay a cheaper down payment. HUD also supports Community Development Block Grants, which helps rehabilitate and revive struggling communities. What’s more, programs such as Habitat for Humanity opens the door to affordable housing and increases ownership in America.
In addition to mortgage and community programs, HUD strives to provide inexpensive housing to families in need. Several programs are in place to assist. For example, low-income families can apply for rental assistance and receive a Section 8 voucher to help with their monthly rental expense. Public housing is another form of HUD housing which helps low-income families secure, safe, suitable and sanitary housing conditions.
The Housing and Urban Development also works with nonprofit organizations and communities throughout the country to provide transitional housing for the homeless.
The department doesn’t only support affordable housing, but also fair housing. The Fair Housing Act prohibits housing discrimination by landlords, real estate agents and mortgage lenders. No one can be denied housing because on their race, color, national origin, religion or sex. Furthermore, landlords and lenders cannot discriminate based on sexual orientation or a handicap. If discrimination occurs, victims can file a complaint with HUD. The department will investigate the claim, and if necessary, prosecute the offender.
In addition to mortgage assistance programs that provide affordable housing and fight discrimination, the Housing and Urban Development offers a housing counseling program that educates tenants and homeowners on how to manage properties and their finances.
By means of this program, HUD provides advice on buying a home, renting properties and improving credit. This program also provides information on the various mortgage loan options available, such as FHA mortgage loans, reverse mortgages and the Making Home Affordable program. The department also employs housing counselors to assist borrowers who default on their mortgages, which can help them avoid mortgage foreclosure and keep their homes.
Although the U.S. Department of Housing and Urban Development is not a real estate agent or a mortgage lender, they do maintain a supply of properties for sale. If a homeowner with an FHA-insured mortgage defaults on his loan, the Federal Housing Administration pays the lender and then transfers the property to HUD.
HUD foreclosures are sold like other real estate properties. These properties are appraised and listed at a fair market value. Each state has a listing for HUD homes. Interested buyers can visit HUD.gov and search “homes for sale” in their city or state. There is a bidding process and a period to submit bids. The department typically accepts the highest bid and closes on loans within 30 to 60 days.
HUD does not lend funds, thus anyone hoping to purchase HUD foreclosures must secure financing with a mortgage company. All HUD properties are sold “as-is,” thus new owners are financially responsible for all repairs and improvements. However, the list price for a property will reflect the present condition of the property and take into account any needed repairs.
The purpose of the United States Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for everyone. HUD is working to strengthen the housing market to boost the economy and protect consumers. The point is to meet the need for quality affordable rental homes while utilizing housing as a platform for improving quality of life.