You can buy real estate properties from the government at low and discounted prices through government foreclosures. A regular homeowner purchases a home with an FHA insured loan. If the home was insured by the Federal Housing Administration (FHA) , however, the foreclosure process happens a little differently. Because it is costly to oversee and maintain real estate owned properties, the government has a strong incentive to move these properties off the market as quickly as possible.
The U.S. Department of Housing and Urban Development (HUD) reimburses the lender for its losses in foreclosure, takes the property and turns it over to a management company for sale. Prospective home buyers who require financing must obtain financing by way of a lender, bank or mortgage broker.
The dollar home program is a direct sales program through which permits eligible Governmental Entities to purchase certain HUD Real Estate Owned (REO) Properties for one dollar. HUD homes are usually priced at fair market value, with adjustments in the pricing made to reflect whatever repairs the home may require.
HUD homes can be purchased by anyone. There have been cases in different parts of the country where families have purchased foreclosed homes to find that they were previously used as meth labs. All VA foreclosures are listed on the local Multiple Listing Service by local real estate agents.
Mind your due diligence: Before shopping for HUD homes, make sure to research your target markets, including comparable sales and potential after repair values. All financing options are available for HUD homes, including FHA , VA , and conventional financing.