The government acquires HUD foreclosures when a FHA borrower defaults on their mortgage and the lender forecloses. FHA insurance guarantees that the lender gets paid and title is then transferred back from the lender to HUD. HUD offers their real estate foreclosed homes for sale at deep discounted prices to buyers who intend to reside in the homes at their primary residences. Since HUD is not in the real estate business, they must get rid of their homes quickly, and offer them for sale at 30% to 50% below current market value. When you make an offer on a HUD homes in Fort Smith, Arkansas, it must be made through a local Realtor. You can find HUD homes by logging onto the hud.homes website and clicking on the State of Arkansas.
HUD homes are great deal because they allow the buyer to purchase a home that they may not be able to afford otherwise. The homes are sold as is for cheap prices. Many homes are viewed as terrific bargains even though they need repairs. It is always a good idea to get a home inspection on a HUD foreclosed home so you can determine the condition of the home and allow for repairs in your budget. HUD does not make repairs on their homes offered for sale, and they don’t accept offers that are not full price.
Non-profit organizations and governments can purchase HUD homes that have been on the market for more than 180 day s for as little as $1.00. To find out about the $1.00 program, you can visit the HUD website.
Eligibility Requirements
- In order to purchase a home owned by HUD, buyers must meet the following criteria:
- Must be used for buyer’s primary residence. Investors can bid on the homes if there are no other buyers who are planning to purchase the home as their primary residence.
- Have to find your own financing. Traditional Fannie Mae or FHA financing can be obtained to purchase a HUD foreclosed homes. You may be eligible to obtain a FHA 203(k) rehab loan for your repairs if the property is a one to four unit dwelling that has been completed for a year. Eligible improvements include painting, room additions, decks, energy green conservation renovations, health and safety repairs, replacing heating and air conditioning systems and ventilation.
- Must close on time.
- Only full price offers are accepted. There is no bargaining o the price.
- HUD may agree to pay up to 3% of your closing costs if you request it in your offer.
- HUD pays the Realtor’s commissions up to 6% of the purchase price as long as it is written in the offer.
- You must submit a bid through a licensed Realtor. HUD will respond to offers within 48 hrs. after the bidding period closes. They will advise your Realtor if you are the winning bidder.
HUD Good Neighbor Policy
HUD’s Good Neighbor Policy encourages buying properties in revitalization areas. There are special incentives offered to law enforcement personnel, firefighters, emergency medical technicians and teachers to purchase homes in these areas at 50% off the list price. For more information, you can check the HUD website.
There are other great opportunities to purchase foreclosed homes from banks and short sale opportunities as well that investors and buyers should check into in the Fort Smith area as well that offer buyers deep discounted prices. A local Realtor can help you find these opportunities also because banks generally list their REO inventory with local Realtors, as do private sellers who are in default on their mortgage and need to sell their home as a short sale. Local newspapers and the Internet are other good resources to find HUD homes, REO’s and short sales. Keep in mind there is a lot of competition for these homes so if you find one, you should act quickly and put in an offer before someone else snaps up the home. Purchasing a HUD foreclosed home is a great investment because you know you are getting a property at or below market value with built in equity. Smart buyers and investors are taking advantage of the great bargains that Fort Smith, AR HUD foreclosed homes have to offer right now before the opportunities are gone.
