| HUD government homes or repo homes where | | | | earnest money will be forfeited if you fail to close |
| the mortgage was insured by FHA and then | | | | on your investment property for any reason |
| foreclosed upon may be bought as | | | | within the 45-day period. |
| owner-occupied homes or by investors. The | | | | All other criteria for buying hudhomes, whether |
| process for an investor is different and all | | | | you are an investor or buy the HUD home as an |
| investors must abide by specific guidelines. | | | | owner-occupied residence remain the same. For |
| Every foreclosed home for sale by HUD is first | | | | example, once your bid is accepted as an |
| placed on the market for ten days where only | | | | investor, your real estate broker must submit |
| buyers who intend to occupy the home are | | | | your signed sales contract within 48 hours. You |
| allowed to bid. This is called the Exclusive Listing | | | | and your real estate agent will then work with an |
| period and investors are not allowed to bid during | | | | appointed closing agent and submit the required |
| the first 10 calendar days after the home listing is | | | | documents to close within the 45 day time period. |
| posted. Listings are posted every Friday morning | | | | Failure to close in the prescribed timeframe, may |
| and from that time, for the next ten calendar | | | | cause you to lose your earnest money. |
| days, as an investor, you may not submit an | | | | It is recommended that you use the appointed |
| offer. | | | | closing agent. If you choose your own closing |
| Once the 10 calendar day exclusive listing period | | | | agent, they will not pay their fees. They will, |
| has passed, they open the bid to the general | | | | however, pay the fees of their approved closing |
| public, which includes bids by investors. This | | | | agent. |
| general public bid period is where as an investor | | | | If you find you can't meet the 45-day deadline to |
| you can make an offer though a real estate | | | | close on your new investment property, your real |
| broker who is licensed to sell HUD homes and | | | | estate agent should contact the closing agent two |
| these bids are reviewed and the highest | | | | weeks prior to the 45-day deadline. Extension |
| acceptable bid will be selected. | | | | fees are required if HUD accepts your Extension |
| HUD homes are priced and sold at market value | | | | Request Form as submitted by your real estate |
| or what homes in the area are selling for through | | | | agent. All investors must pay these extension |
| an appraisal process. If you, as an investor, are | | | | fees in certified funds, cashier's check, or money |
| interested in a hudhome, you should indicate to | | | | order. Fees are set forth on the following basis. If |
| your real estate agent to keep an eye on any | | | | the investment hudhome you are buying is |
| given home you are looking at for an investment | | | | $25,000 or less, the fee is $150. If the investment |
| to ensure you will have a chance to bid once the | | | | property is $25,001 to $50,000, your extension |
| exclusive listing period for owner-occupied bids is | | | | fees will be set at $225. Finally, if the investment |
| closed. | | | | home you are buying is $50,000 or over, you will |
| If you are successful in making a bid as an | | | | be required to pay $375. Again, all fees must be |
| investor, you must follow the guidelines. Within 48 | | | | paid in certified funds as described above. |
| hours after your bid acceptance, your real estate | | | | Buying a foreclosure home as an investment can |
| broker must submit a signed sales contract and | | | | be an easy process if you make sure the real |
| then you will have 45 days to close on your HUD | | | | estate agent you are using is knowledgeable and |
| home investment. | | | | qualified to sell hudhomes. Seek out real estate |
| Down payments are different for investors. As | | | | brokers who are licensed to sell these properties |
| an investor, if you win a bid on a one-unit | | | | and are aware of the timelines, bidding process, |
| hudhome, a 25% minimum down payment is | | | | and deadlines for investors to ensure you win the |
| required. If you win the bid on two to four units, | | | | bid. Your real estate agent should also be versed |
| a 15% minimum down payment is required. | | | | in earnest money and down payments required |
| Earnest money is also required by HUD when | | | | by investors as they vary from owner-occupied |
| buying a hudhome, even for investors. HUD | | | | dollars. Finally, if you find you need to file an |
| requires $1,000 earnest money for offers more | | | | extension for closing as an investor on a |
| than $50,000 but earnest money never exceeds | | | | hudhome, make sure your real estate agent |
| $2,000. $500 is required for home priced and sold | | | | understand the fees involved and how they are |
| at $50,000 or less and if you are purchasing a | | | | to be paid. |
| HUD vacant lot, 50% of the listing price will be | | | | If you think a foreclosure home is an investment |
| your earnest money requirement. | | | | you want to make, remember that all HUD |
| As an investor, your earnest money may be | | | | homes are sold on an "as-is" basis and do require |
| returned under certain conditions. For uninsured | | | | a home inspection by a licensed home inspection |
| sales, 100% of the earnest money is forfeited by | | | | contractor. Make sure you understand that if any |
| the investor for failure to close, no matter what | | | | needed repairs or zoning changes are required |
| the reason. It is important to note here that even | | | | that you will need to take care of this on your |
| as an investor you only have 45 days to close so | | | | own. There are no warranties or help with zoning |
| ask your real estate agent what is required by | | | | changes on your behalf as an investor. |
| you to ensure you close on time and do not | | | | Investing in a distressed property can be a good |
| forfeit your earnest money. | | | | idea if you wish to rent out the homes you buy |
| If your sale is an insured sale, 50% of your | | | | or revitalize them and resell them at a higher |
| earnest money will be forfeited for failure to close | | | | profit. You are encouraged to make sure your |
| or if the investor is considered to be an | | | | real estate broker is extremely educated in |
| unacceptable buyer. 100% of your investor | | | | handling your investment purchase. |