The Kenny Klaus Team

What is a HUD Home?
If a loan insured by the Federal Housing Administration (FHA) goes into default,
the lender must take steps to collect on the loan. This may result in the lender taking possession of the collateral Real Estate. If this occurs, the lender may submit a claim against the FHA insurance fund and convey ownership of the property to the United States Department of Housing and Urban Development (HUD). HUD in turn sells the property at market value as quickly as possible. MLM III is a Marketing and Management contractor for HUD owned residential properties, 1 to 4 units; we maintain and sell these properties in accordance with HUD guidelines.

 

How are HUD Homes Sold?
HUD homes are listed on the MLS and on the internet. Brokers registered with HUD and their agents may place bids electronically on these properties on behalf of a purchaser. The bid with the highest net to HUD is selected as the provisional winner subject to receipt of all required documents.

Who can buy a HUD Home?
Any buyer that can secure a loan to purchase real estate, or can pay cash, is eligible to purchase a HUD home. Purchasers must use a broker or agent who is registered with HUD to submit a bid on a property. Purchasers must also have a pre-qualification letter from a lender or proof of cash funds in the amount of, or greater than, the property they are purchasing.

 

HUD Houses in Phoenix AZ. The Financing Options:

IN – Insurable – 203(b)
• Properties listed IN appear to qualify for FHA 203(b) financing. There should not be any MPR repairs necessary.

IE – Insurable with Escrow – 203(b) Repair Escrow
• Properties listed IE are eligible for FHA financing with repairs to be completed by the purchaser after the close of escrow. These repairs must be Minimum Property Requirements (MPR) Repairs totaling less than $5,000. MPR Categories include; roof, structural, and mechanical systems, such as plumbing, electric, and heating.
• The cost for the repairs is not paid by HUD; however, the buyer may finance the repair escrow amount in their mortgage. The lender is responsible for inspections of the repairs and authorizing release of funds.
• On the purchase agreement the repair escrow amount is not deducted from the Net to HUD or added to the purchase price on line 3. The repair escrow amount should only show on line 4.
• REPAIR ESCROW ONLY APPLIES TO FHA FINANCING – not cash or conventional transactions.

UI – Uninsurable – Conventional, Cash, or 203(k)
• Properties listed UI generally are in need of extensive repairs and are usually purchased with cash or conventional financing. The only type of FHA financing they may qualify for is a FHA 203(k) loan. 203K FHA financing is a rehabilitation loan for owner occupants purchasing properties that have over $5,000 dollars worth of MPR repairs. Not all UI properties will qualify for FHA 203(k) financing.

All of these Homes are being Sold AS-IS but with AZ HUD Home Store properties, you know up front, the value of the home, the properties condition and if Termites were discovered and treated for. For Help with Purchasing a HUD Home or for More Info on the process of searching for and/or purchasing a HUD Home contact us today. 480-354-7344 or [email protected]