Government Foreclosures for Real Estate Investors
Government Housing and Urban Development, or simply HUD, foreclosures are available throughout the country. Buying one of these hud foreclosures is a different process than the normal purchase process from a private seller. The other government foreclosure type is the VA foreclosure, these are the Department of Veteran’s Affairs foreclosures.
The FHA is an arm of HUD and it offers federal mortgage insurance. When a house goes into foreclosure, the lending institution is able to put in a claim with the FHA for the remainder due on the mortgage that was issued. The housing administration settles the debt and turns the title to the property over to HUD. This is the same procedure as the one applied when the Veteran’s Affairs Department forecloses on property.
VA foreclosures are particularly attractive because you actually don’t have to be a veteran to purchase them with preferential loan rates and no money down. All government foreclosures are priced at market rates but allowances are made for the state of the property. If repairs need to be made, then the cost of these repairs and improvements will be factored into the sale price.
When you buy one of these homes, you are buying it as it is where it is. There is no government agency covering the cost of any work that is needed. HUD and the DVA leave you to do the inspection work and make sure you know what you are buying.
The HUD website for your state will provide a list of available HUD foreclosures. Once you find a house you are interested in you can go to the appropriate links and find a real estate agent will show the property to you. HUD does not deal with the buyers but uses the agents to this. Ocwen Loan Servicing is used by the Veteran’s Administration to sell and manage their real estate offerings.
When you want to buy a government foreclosure it starts with you making a bid for the property. Bids will be accepted for a foreclosure for a certain length of time. After the bidding has ended the sealed bids are opened and the highest bidder wins.
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The United States offers government foreclosures through the Department of Housing and Urban Development in each state. HUD foreclosures are a lot different than real estate deals made in the public sector. VA foreclosures are another type of government foreclosure handled through the Department of Veteran’s Affairs. When you buy one of these homes, you are buying it as it is where it is. HUD and the DVA leave you to do the inspection work and make sure you know what you are buying. The process starts with making a bid for the property. After the bidding has ended the sealed bids are opened and the highest bidder wins.
- David E. Williams
