Federal HUD government foreclosed homes are properties that you can acquire cheaply with low down payments. When borrowers with FHA loans default, FHA pays the lender their losses and acquires ownership of the properties. HUD is not in the real estate management business so they offer their foreclosed homes for resale to the public at deeply discounted prices. You can get some good quality homes in the Allentown, PA area by checking the HUD homes website and working with an area Realtor.
Educate Yourself First
Before you run out and buy a HUD home, you should be aware of the following:
- HUD requires that you make your offer through a licensed Realtor.
- You don’t need a large down payment.
- Buyers have to find their own financing.
- You must submit a full price offer.
- If you qualify for FHA financing, you must purchase FHA mortgage insurance.
- You must reside in the home as your primary residence. If there are no bids from buyers who intend to reside in the property, then investors can purchase HUD homes.
- You can obtain a home inspection.
- You can obtain title insurance.
- Federal foreclosed homes are sold in an “as is” condition.
- HUD may agree to pay your closing costs up to 3% of the total purchase price of the home.
- HUD will pay real estate commissions, as long as your Realtor writes it in the contract.
Federal foreclosed homes sell quickly because they are in high demand. They offer buyers an opportunity to purchase a quality home below market prices with built in equity in a neighborhood of their choice. Cash buyers have an advantage right now so they tend to get more offers accepted because lenders know they can close quickly. When you find a quality federal foreclosed house, you should not hesitate to make an offer because if you don’t, you are guaranteed someone else will. Don’t be discouraged if you don’t find a HUD home right away, just keep looking. There are also good investment opportunities in bank owned REO’s, short sales and foreclosed properties that you can purchase at foreclosure auctions in the Allentown, PA and surrounding areas. Foreclosed homes are keeping resale home prices down in the area as well. Sellers are motivated, and they are offering all sorts of seller’s incentives such as seller financing, paying homeowner dues, and offering credits for repairs and other incentives. So don’t wait too long if you are looking for qualify foreclosed houses in the Allentown area because they may not be around forever.