There are many resources available for potential first time home-buyers. One option is through the U.S. Department of Housing and Urban Development (HUD) as they have incentives and procedures in place to make purchasing a HUD foreclosed property enticing to dwelling shoppers. When home-owners default on an FHA (Federal Housing Administration) insured mortgage the home eventually becomes the property of HUD. To mitigate the loss caused by the foreclosure, HUD will sell off the property.
In general, almost anyone can qualify for purchasing a HUD foreclosed property. Like purchasing any other type of home, money for a down-payment is a necessity, as well as the ability to qualify for a mortgage. HUD first tries to seek home buyers who are interested in making the property their primary resident. However, if after the required waiting period the property does not sell to an “owner-occupant,” then investors may also purchase the HUD properties.
Purchasing a HUD foreclosed property may be especially enticing to those working in certain professions because there is a “Good Neighbor Initiative.” HUD foreclosed properties in designated areas are available to teachers, firefighters, non-profit agencies, law enforcement officers, emergency medical technicians and local governments at discounted sales prices.
Consumers interested in purchasing a HUD foreclosed property need to work with a HUD certified real estate broker. All the properties available for sale can be viewed on the HUD website. Like foreclosed properties offered by a bank, HUD encourages the buyer to make the proper inspections before finalizing the home purchas, as HUD will not make any financial contributions to repairing the home to the liking of the new owner.