When a homeowner defaults on a FHA mortgage, the lender files a foreclosure claim for the loan balance, which is paid to the lender by FHA. FHA then transfers ownership of the home to HUD. If you are interested in buying foreclosed HUD properties in Colorado Springs, you can buy a HUD foreclosure with as little as a $100.00 down payment. HUD is not in the real estate business and wants to get rid of these homes as quickly as possible.
You can locate foreclosed HUD properties in Colorado Springs by checking the HUD repossession homes for sale website. If you find a foreclosed HUD property that you are interested in, then you can simply contact a local real estate agent who will present the offer on your behalf.
Why Buy a HUD Foreclosed Home?
Foreclosed HUD properties are sold at substantially discounted prices usually way below market. Buying a Colorado Springs HUD home is a great investment because you don’t need a large down payment. Since prices are so affordable, you can take advantage now of buying a home in the Colorado Springs area or surrounding area that you may not have been able to afford a few years ago.
Homes Sold in As Is Condition
HUD may have a report on the condition on the home, but it is recommended that you conduct a physical inspection before closing. Ask your real estate agent. All homes are sold in an as is condition, and HUD generally does not make any repairs. By conducting your own home inspection, you will know what repairs, if any, the home needs and be able to budget for them accordingly.
Qualifying to Purchase HUD Foreclosed Homes
The following guidelines should be used when purchasing a foreclosed HUD property:
- You must obtain your own financing.
- If an FHA mortgage is used to purchase the home, you must purchase FHA mortgage insurance
- The home must be your primary residence. If no owner occupants bid on the HUD foreclosed properties, then investors may bid.
- The offer must be a full price offer.
- HUD may pay up to 3% of the price towards the buyer’s closing costs.
- A licensed real estate agent must represent and submit your offer on your behalf.
- If your bid is accepted, HUD will notify your agent usually within a day or two after the bid is submitted. You will be given a closing date of somewhere between 30-60 days from the accepted date of your contract with HUD. Be sure to have your financing available so you can close on time.
- HUD will pay your real estate agent’s commission up to 6% of the sales price of the property. Your agent must insert special language in the contract stating that HUD is paying the commission.
Since housing prices in Colorado are still very affordable, it is smart for buyers to invest in a HUD foreclosed home. You can buy the home with as little as a $100.00 down payment, and you are buying a property with a built in equity. Since home prices in Colorado Springs are closer to the 2004-2005 prices, the Colorado Spring market has not been affected as hard as other markets and is considered a very good place to buy a home.