First-Time Buyers Find HUD Homes a Good Buy
October 21st, 2009 by 
Joseph Smith
HUD homes foreclosures are being taken off the market in great numbers. Thanks to first-time homebuyers who flocked to the market to take advantage of the federal tax credit of $8,000 before it finally expires by the end of November.
Industry experts said that almost anyone is eligible to purchase a property owned by the U.S. Department of Housing and Urban Development (HUD) as long as they have the cash or have been approved to take out a loan to fund the purchase.
Experts explained that HUD homes have undergone the complete foreclosure process which started when the homeowner defaulted on a loan guaranteed by the HUD unit, Federal Housing Administration (FHA).
As soon as homeowners missed their mortgage payments, lenders would file a claim for the unpaid amount at the HUD. The HUD will then pay off the lender and takes control of the distressed properties.
Just like with lenders, HUD is not in the business of property ownership. So the agency will immediately sell the foreclosed properties on its portfolio to recover its investments. HUD announces the foreclosed properties for sale through Internet listings, approved real estate agents and weekly newspaper advertisements.
To help potential buyers make a successful HUD home purchase, industry experts advise them to set the amount they are willing to spend for a property. They suggest using a loan or affordability calculator. Or buyers can go to their local bookstores and purchase a book or any material that gives information about financing a property purchase. These reference materials would most likely contain information on mortgage payment costs with various interest rates.
Industry experts said that potential buyers should know what they want before going out to look for a foreclosure home to buy. They should take some time to learn pertinent information, such as the type of houses they want, accessibility, desired square footage and so on.
Experts agree that the process of buying HUD foreclosure is simpler compared with the conventional home buying method. The HUD usually based its initial listing on the assessed fair market value of the property. The fair market value is based on assessments conducted by real estate appraisers.
The HUD homes foreclosure will then be placed on the market. Potential buyers should be aware that the owner-occupants are given the highest priority during the sale process.
