Homes for Sale! Homes for Sale! Government Offers Deals to Potential Buyers
As some potential owners out there are overwhelmed by the Florida home loan process - and others fear there are no affordable deals to be found on houses - it’s important to keep all options in mind.
Remember: Goverment sponsored agencies - such as Housing and Urban Development (HUD), the U.S. Department of Agriculture and the Veteran’s Administration - take possession of foreclosed properties and return them to the market. Lower-income families can benefit from these offers.
“It’s one of the better deals you’ll find anywhere,” says HUD spokesman, Jerry Brown.
Value of these homes
So, can you really afford these opportunities? The idea is to make them available to individuals across income brackets. The properties are sold at appraised or below appraised value and the agencies, especially HUD, make them easy to buy with generous Florida mortgage loan terms with low up-front costs.
“It’s 3 percent down and 100 percent yours,” says Brown.
Here’s how it works: HUD homes are acquired when a mortgage holder defaults on a Federal Housing Administration (FHA) mortgage, which are goverrment sponsored loan guarantees designed to promote home ownership. When such Florida home loans go bad and lenders foreclose on the properties, the agency pays the lenders off and takes over the homes.
“Because the sub-prime loans target low-income borrowers and those with impaired credit, many loans go into default,” says Laurie Maggiano, who heads HUD’s single-family home sales program.
Where houses go
Homes are first offered to approved non-profit organizations, mostly in inner-city neighborhoods, at a 50 percent discount to their appraised values. The non-profits then act as flippers, rehabilitating and reselling the foreclosed real estate.
Any properties not picked up by the non-profits are then offered to police officers and teachers at a 10 percent discount. HUD also recently began giving first shot at homes coming into the system to people made homeless by Hurricane Katrina at the same 10 percent discount.
If, after five days, no teacher, officer or hurricane victim makes an offer, HUD puts the properties on auction for the general public. At that point only buyers who intend to live in the house may bid.
After 10 days more, however, anyone, including investors, can make an offer.
Decrease in HUD homes in certain markets
Today, there are a total of more than 28,000 HUD homes available. Although they come from nearly every state, the really hot markets provide little of HUD’s inventory. Homes in California and the rest of the Southwest simply don’t make it ithrough the foreclosure process; they’re snapped up in the early stages of delinquency.
The large inventory in Florida has also dried up.
HUD sells everything “as is” and tries to include as much information about the state of each property as possible, including an environmental compliance report and a fairly extensive property condition report.
It’s advisable to get a thorough inspection done before buying. Not only will the inspection reveal just how many repairs and how much it will cost to make a place livable, but the rehab expenses may be added into the Florida home loan if uncovered before closing.
These possibilities should be considered by all seeking a reasonable price on a new home.
