HUD homes: What buyers should consider

by Rebecca Schaffer 07/21/2024

Housing and Urban Development (HUD) properties present unique opportunities for homebuyers. By purchasing a previously foreclosed home, you might save money on the sale and mortgage. But is a HUD home the right choice for you? Here are some of the key benefits to buying a HUD home:


Low Price

HUD wants to recoup the cost of the foreclosure as soon as possible. This translates into lower sale prices. While each property goes through an appraisal process to determine its value, the purchase price is usually under the market average for comparable homes.


Get In Before Investors

HUD homes are sold through auction. The auction process gives special priority to residential buyers by granting them a 30-day period to bid on the home. After that, the auction will open up to investors as well. This head start can help you get a great deal on a home without worrying about an investor taking it at the last second.


Help With Closing Costs

Closing costs are a major expense when buying and selling a home. As an incentive to homebuyers, HUD spends a certain percentage of the home's purchase price to help cover closing costs. This can save a homebuyer thousands of dollars compared to buying a traditional home.


Lower Down Payments

With financing, buying a HUD home is like a traditional home purchase. You can choose from many loan options and mortgage providers. In certain circumstances, buying a HUD home means getting a loan with a smaller down payment. HUD wants to sell the property as soon as possible, so they offer options for low down payments to encourage new buyers.

If you're considering a HUD home, keep these benefits in mind. While it might not be the right choice for every situation, for many homebuyers, the incentives and special perks can greatly outweigh possible drawbacks. 

About the Author
Author

Rebecca Schaffer

I fell in love with Northeast Florida after a visit 10 years ago. My husband and I decided this was where we would move from the hectic pace of South Florida. As our son was about to transition to High School we made the move and haven't looked back. We quickly settled into the Saint Augustine area. It always amazes me how friendly and caring the people are in northeast Florida and it was a very quick process to make friends and get plugged in. As a real estate investor myself, I understand the experience and the needs one has when buying, selling and renting a home. It is one of life's biggest decisions. It is so helpful to have a realtor with knowledge and patience to provide the guidance one needs through the process. This is where I focus to provide my customers the best possible experience.