Government Foreclosures:
The Key to the American Dream

• Reasons for Buying a HUD or VA Home
  • Titles are Free and Clear of all liens and encumbrances
  • Low Move in Cost
    • Low Down Payment
    • Very Low Closing Costs
  • 30 Year Fixed rate Mortgages
    • Direct Government Loans, Government Insured Loans
    • Or Conventional Financing
  • Many Homes are below Market Prices
  • Owner-Occupants or Investors
  • Beautiful Homes in All Areas or Handyman's Specials

• What is a HUD Home?
  • When a lender is forced to foreclose on an FHA insured loan they can file
    a claim to have HUD pay the balance due on the mortgage. HUD then
    assumes ownership of the property, which then becomes a HUD Home.

• What does HUD do with these homes?
  • HUD is anxious to return these properties to private ownership.

• How are HUD Homes sold?
  • HUD homes are sold through sealed bids. A HUD registered real estate
    broker may submit bids/contracts for purchase of these properties.

• Who can purchase a HUD Home?
  • Anyone can buy a HUD Home. HUD properties are offered in compliance
    with the Fair Housing Act, without regard to buyer´s race, color, religion, sex,
    handicap, familial status or national origin. Most HUD Homes are offered on
    a priority basis to owner-occupants, however, after the priority period expires,
    unsold properties are then available to all buyers, including investors.

• What is the Pricing Structure?
  • HUD Homes are offered at what HUD considers the fair market value for the
    property in "as-is" condition. HUD Homes are sold "as-is" without warranty.
    Because of this, these homes can be a great opportunity for the fixer-upper.
    Not all HUD Homes require repairs, however, when they do, they can be a
    great bargain. HUD's list price will reflect which properties will require buyers
    to make improvements.

• Is it true that HUD Homes require only 3% down and have low closing costs?
  • Yes! Buyer must obtain their own financing through their own cash reserves or
    a mortgage lender. FHA-insured mortgage financing is available on many of the
    properties sold through approved lenders, depending on the credit-worthiness
    and income requirements to qualify for such loan. You can consult your real
    estate agent to determine if a property is eligible for FHA insured financing.
    
    When submitting a bid, the down payment can be as low as 3% depending on
    the sales price. Also, HUD will pay up to 3 1/2% of the sales price in buyer's
    closing costs when asked to do so in the contract. However, this does reduce
    the NET-TO-HUD, which is what determines who is the successful bidder.
    When a buyer requests that HUD pay the closing costs, it is suggested that they
    boost their bid upward to be more competitive. Because of HUD's aggressive
    pricing policy, most HUD Homes go OVER the list price.

• What is a VA Home?
  • When a lender is forced to foreclose on an VA guaranteed loan they can file
    a claim to have VA pay the balance due on the mortgage. VA then assumes
    ownership of the property, which then becomes a VA Home.

• What does the VA do with these homes?
  • VA is anxious to return these properties to private ownership.

• How are VA Homes sold?
  • VA homes are sold through sealed bids. A VA registered real estate broker
    may submit bids/contracts for purchase of these properties.

• Who can purchase a VA Home?
  • Anyone can buy a VA Home. VA properties are offered in compliance with
    the Fair Housing Act, without regard to buyer´s race, color, religion, sex,
    handicap, familial status or national origin.

• What is the Pricing Structure?
  • VA Homes are offered at what VA considers the fair market value for the
    property in "as-is" condition. VA Homes are sold "as-is" without warranty.
    VA properties also tend to go for OVER the list price.

• What about Financing?
  • VA offers seller financing on many of these properties to Veterans and Non-
    Veterans alike.

• What about the Down Payment and Closing Costs?
  • The Down payment for Veterans is ZERO. And, for Non-Veterans, the down
    payment ranges from ZERO to 5% depending on the price of the property. VA
    Closing costs are also minimal - a 1% funding fee to VA, recording fee (usually
    less than $50), and a tax service fee of $25. Buyer is responsible for prepaid
    items such as insurance, tax escrow, etc. There is no Mortgage Insurance
    premium on a VA loan, which means your payments will be considerably lower.

• Sounds good to me! How do I find HUD & VA Homes and place a bid?
  • Contact a HUD & VA approved real estate agent of your choice. HUD & VA
    will pay the brokerage commission. HUD & VA Homes are a great way to buy
    a home with minimal investment.

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