To secure the best deals on government foreclosures in Chesapeake, VA you may want to purchase a HUD foreclosed property. Homes owned by HUD can be found on their website. Listings are also posted on the local Chesapeake, VA MLS. Your Realtor can help you find a HUD property.
When a homeowner with an FHA loan defaults, the loan balance is paid by FHA to the lender. Title to the home is then transferred to HUD. HUD does not want to manage real estate so they are interested in selling their foreclosure inventory at a discount as soon as possible. The great thing about buying foreclosed houses from HUD is you can buy them with a small down payment. The properties are offered for sale through various Internet websites by management companies that work with HUD. Your real estate agent must submit your offer on your behalf. The commission is paid by HUD as long as it is set forth in the contract. Prices are offered based upon a recent home appraisal. HUD homes are sold during an “Offer Period”. When the period expires, all the offers are opened and the highest or most favorable offer is then accepted. HUD will notify your Realtor within 48 hrs.
HUD Foreclosed Homes
You can purchase the home by obtaining an FHA loan. Now is a great time to invest in HUD foreclosed homes in all neighborhoods and price ranges. While some properties need major repairs, there are many others that are in good condition to choose from. If you are handy, you may be interested in a fixer. Or you can apply for an FHA 203 (k) rehabilitation loan. You should be able to find a home that works for your budget and needs.
You will want to have a home inspection to determine if the home needs any repairs. Sometimes HUD provides a property report. All HUD homes are sold in an “as is” condition. HUD will not make repairs on their homes so you should budget for repairs.
Guidelines to Purchase HUD Foreclosed Houses
The following guidelines apply when you purchase HUD foreclosure listings:
- You are responsible for obtaining your own financing.
- If you are obtaining an FHA mortgage, you must purchase FHA mortgage insurance.
- For HUD homes that need repairs, you may qualify for a FHA 203(k) rehabilitation loan.
- You must purchase the home as your primary residence. If no one bids on the home, then investors may make a bid.
- There is no negotiating on the price. You must offer full listing price.
- You may ask HUD to pay up to 3% of your closing costs.
- All offers on HUD foreclosure homes must be presented by a licensed real estate agent on your behalf.
- HUD will notify your agent if your bid has been accepted usually within a day or two after being submitted. You will have 30 -60 days in which to close the transaction so make sure you have arranged your financing.
- HUD will pay your Realtor’s commission up to 6%. Your agent must include special language in the contract that HUD is paying their commission.
If you are lucky to have your offer accepted by HUD, you get to purchase a discounted property. With today’s low interest rates and many foreclosure properties, it’s a good time to buy discounted HUD government properties, REO (real estate owned) owned properties, and pre-foreclosed properties in the Chesapeake, VA area.