HUD HOMES DES MOINES AREA

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HUD HOMES

HUD homes can offer an afforable alternative to homebuyers and investors seeking value. Often buyers can expect strong equity from the purchase. In the Greater Des Moines area HUD homes come on the market every Friday. Read here to understand the basics of purchasing lucrative HUD homes or HUD Town Homes in the Des Moines area

There is a lot of interest from the public in HUD homes, or homes offered by the Department of Housing and Urban Development. The process of buying HUD homes has changed in recent years and this report is meant to give prospective HUD home buyers a broad overview of the process as it now exists.

HUD homes come on the market as a result of default on FHA mortgages by home owners. FHA used to be one of the only lending programs available to buyers which did not require a significant downpayment. With the explosion of 0% down programs in the lending industry, fewer FHA backed loans are being written, but there still exist a number of homes that have been purchased using FHA programs.

HUD does not like the term "foreclosure" to be associated with HUD homes, but that is in fact what they are. HUD acquires the home through the mortgagee's default, and then resells the home through an agent. In the case of Iowa, the agent is Best Assets located in Minneapolis Minnesota. Best Assets manages HUD's portfolio of homes, but lists them with a MLS participating broker. In Iowa the broker is RE/MAX Real Estate Concepts.

New HUD homes come on the market here on Fridays. Priority bidding is given to owner occupants for a 10 day period. So, for example if a HUD home comes on the market on the 8th, owner occupants have until midnight of the 17th to submit a bid on the property. Bids are collected throughout the initial 10 day period. It does not matter if you are the first bid or the fifteenth, if you place the bid on the first day, or at 11:59PM on the 10th day.

Buyers must use an agent with a brokerage that has made an application to Best Assets for a special registration number. Buyer's agents submit bids online, and the result of the bidding is posted on the Best Assets website after 1pm the day after the bidding period is over. Following our earlier scenario, this would be the 18th. Earnest money is required in the amount of $500 up to $50,000 in listed value, $1000 over $50,000 in listed value.

If an acceptable owner occupant bid has not been placed during the priority period, the HUD home is open for general bidding, meaning investors may now bid on the property. Bids are then taken daily during the business week, until the property is sold.

Procedures are very precise for offers on HUD homes and must be followed to the letter. If a bid is accepted, a completed contract with all accompanying documents must be received by Best Assets within 48 hours of acceptance. If the offer is not received in 48 hours, the home will go back on the market. If the paperwork is not done correctly, Best Assets may reject the offer and place the property back up for general bidding. In HUD's own words: ****If your bid package is not received within 48 hours after the date the bid is awarded or your contract corrections are not received within 24 hours, your bid will be cancelled. No Exceptions.

HUD homes are sold AS IS without warranties or repairs. HUD does provide a Property Condition report however, which is the result of observations made by a Best Assets selected inspection company. These reports may run to 30 pages, depending on the home. Succesful bidders are allowed a 15 day period in which to inspect the property, and may have the utilities turned on, at the buyer's expense.  If the inspection is acceptable, the closing will proceed as normal. HUD requires that the buyer agree to a 60 day close, but the property may close sooner.

Buyers may use one of three types of financing. Conventional, FHA, or FHA with escrow. Conventional would be a loan from any lender not FHA. An FHA mortgage would be through an FHA approved lender. FHA with escrow is for buyers wanting to purchase a home needing repairs to be livable, but are using FHA financing, which normally has stringent requirements that the home be in very good condition. The amount of repairs would be determined by the buyer soliciting bids from licensed contractors, and having the bids approved by the lending institution. The buyer would then get a loan for the home and the repairs, but the repair money would be held in "escrow" by the lender until repairs are completed. Repairs under this scenario would need to be completed in 3 months.

A great thing about HUD homes is that HUD will often cover the buyer's closing costs and pay for a home warranty, with an acceptable offer. This can make the home very affordable. HUD also offers Property Improvement Loan Insurance for financing repairs.

I have greatly simplified the HUD home buying process in the above paragraphs. There are too many ins and outs to explain it in it's entireity in this report.

The process is not simple, and it helps to have an agent such as myself, who has had offers accepted and delivered all the required paperwork in line with HUD regulations.

If you have any questions about the HUD home buying process, I would look forward to providing you information, helping you find a home, and writing and delivering an acceptable offer. You may use the form below to contact me with questions, or to provide an address of a property for which you would like more information.

Matt Grohe can help you with purchasing HUD homes Des Moines, provide Des Moines HUD homes info, West Des Moines HUD homes, Windsor Heights HUD homes, Urbandale HUD homes, Johnston HUD homes, Clive HUD Homes, Carlisle HUD Homes, Pleasant Hill HUD homes, Grimes HUD homes, Van Meter HUD homes, Norwalk HUD homes, Adel HUD homes, Indianola HUD homes, Altoona HUD homes, Bondurant HUD homes, Van Meter HUD Homes, HUD Homes Waukee, HUD Homes Ankney, HUD Homes, Bondurant, HUD Homes Carlisle, HUD home searches, Des Moines HUD homes by e-mail, Polk County HUD homes, Dallas County HUD homes, Warren County HUD homes, Madison County HUD homes, offers on HUD homes, inspecting HUD homes and anything concerning Iowa HUD homes.