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HUD FAQ

What is a HUD Home?
When someone with an FHA Insured mortgage defaults on the loan, the lender forecloses on the home; FHA pays the lender what is owed; and then HUD takes ownership of the home.

How do I qualify for a Hud Home

How can I get financing to buy a HUD HOME?

The Buyer may:

Pay cash
Obtain FHA financing from a HUD approved lender
Secure conventional financing.

What is FHA FINANCING?

There are three main types of FHA Financing

 203(b) Regular FHA Loan - Listed as “IN”

If the Property does not have any mandatory repairs FHA will insure the Loan hence the classification of “IN”

  203(b) - Repair Escrow - Listed as “IE”

When a property has less than $5000 in repairs to bring it up to Minimum Property Standards, FHA will insure the loan provided the repairs are completed by the Buyer or the Buyer’s agent within 90 days from the date of Closing.

It is a cost to the Buyer that the Buyer can finance and add the amount to the mortgage.

The Lender monitors and keeps the funds in an escrow account for disbursement on completion of repairs to the Lender’s satisfaction.    

203(k) - Rehab Loan - Listed as “IK”

When the property has more than $5000 in Minimum Property Standards repairs to be done

The Lender must obtain an Inspection report from an approved 203(k) consultant and a new appraisal

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