Government foreclosures offer you an opportunity to invest in a quality home at a discounted price. When you find Washington, D.C. government foreclosed homes, you are lucky because some properties are sold up to 50% below the going market rate. HUD and VA sell their properties for deep discounts because they government is not in the real estate business, and they need to get rid of the housing inventory quickly. Check the HUD and VA websites for information on homes that are available for sale in the Washington, D.C. area Also, working with a local Realtor is a good idea because you will need to make an offer on government homes through your Realtor. BAC Home Loan Servicing, PL services VA foreclosed homes so you can go to their website to find information about VA foreclosed homes. Another place to get a list of government homes is RealtyTrac or just check other Internet websites.
HUD foreclosed homes are acquired when FHA borrowers default on their mortgages. The borrower was required to pay FHA insurance in the event they default, FHA then guarantees the loan and pays the lender off and purchases back the home. Title then goes back to HUD. The great thing about a government home is you don’t need a large down payment. You may also be eligible for a FHA mortgage, which only requires a 3.5% down payment. VA offers vendee financing on their foreclosed houses whether or not you are a veteran. With a VA loan, you can buy a home with no down payment. VA loans offer low interest. FHA loans are competitive with traditional financing. Check with a FHA or VA approved lender for more information about VA and FHA loan and loan limits.
What to Keep in Mind?
While government homes are good bargains, you should still do your due diligence because the homes are sold as is and there are no warranties or guarantees with them. Although you can purchase title insurance. There are also numerous opportunities to purchase non-government bank owned REO homes in the Washington, D.C. area too. You should take advantage of the abundant inventory, low interest rates and affordable prices that foreclosed homes offer buyers and investors. If you have been thinking about owning a home, a government foreclosed home is a good investment.
How to Purchase HUD Foreclosed Homes?
There are a few rules about owning and purchasing a HUD home that you must be aware of such as:
- The home must be used as your primary residence. If you are an investor, you may be able to place an offer on the home if there are no other buyers who are bidding on the property with the intent of using it as their primary residence.
- You may qualify for a FHA or VA loan.
- Properties are always sold in an as is condition. It is up to the buyer to do their own home inspections.
- If you need to rehab the home, you may also qualify for a FHA 203(k) rehab and purchase loan.
- HUD will not accept offers below the asking price so make sure you offer the full asking price, or your offer will not be considered.
- You can ask HUD to pay your closing costs up to 3% of the purchase price. Be sure to write it in the offer.All offers must be made through a Realtor. HUD notifies the Realtor within 48 hrs. of the status of your offer.
- HUD will pay also pay your Realtor’s commission as long as request it in the offer.
How to Purchase
You need to be aware of the following when you purchase VA homes:
- Offers can only be made through a Realtor.
- If you want the VA to pay your closing costs, you must request it in the offer. They will pay up to 6% of the purchase price towards your closing costs.
- You may qualify for a VA longer whether or not you served in the military.
- The VA will pay your Realtor’s commission up to 6% of the total purchase price providing they request payment in the offer.
- All VA foreclosed homes are sold in an as is condition.
- A $1,000 earnest money down payment is required.
- You must close in 22 days with VA vendee financing, 30 days if you are paying cash and 60 days for all other mortgage financing.
Because Washington, D.C. government foreclosed houses are in such high demand, they go quickly so don’t hesitate if you find one that meets your criteria. Always have a home inspection because some home are in poor condition and need major repairs. The good thing is you know you are getting a property with a high rate of return so even if the home does need repairs, you are still getting a great bargain.