HUD homes are reasonably priced properties that are being sold by the government to medium and low income families wanting to become home owners. These homes are offered through various housing programs initiated by the government in order to support people in building their personal wealth and security.
Most low income families are not able to afford purchasing foreclosed properties through regular financing schemes offered by banks and other lenders, but they do have HUD homes to resort to for instant equity at an affordable cost.
HUD stands for the US Department of Housing and Urban Development and it is the lead government agency that oversees the housing sector. It is deeply involved in programs and initiatives to provide housing to the wider population through grants and affordable loans.
Buyers have several ways to locate these cheap homes. The HUD accredits a large number of licensed Real Estate brokers and agents to offer their inventory of foreclosed properties. Like other types of troubled homes, the HUD foreclosures are being offered at a fraction of their real value since the agency only aims to recover the outstanding loan on the home, which represents loss on their part.
Apart from the affordable price of the home, the HUD also offers grants and assistance, which may be in the form of lump cash or a reduction of the interest rate on the loan. Cash grants can be applied to the down payment or the closing costs. Reduced interest rates mean that the monthly amortization would be even lower for the buyer.
Again, like other foreclosures, HUD homes are sold 'as is', so buyers should expect that some repairs will be needed to restore the home to a livable state. Buyers should still conduct a home inspection to assess the value of repairs, which should be incorporated in the computation of the purchase price.