The US Department of Housing and Urban Development (HUD) sells properties you may be interested or want to buy. The homes that receive no bids during that time, HUD will accept offers as they come in. Instead, one way you can make bids at is by using a HUD-approved real estate agent that will handle the auction transaction for you. The price of the property is fixed at a base price which is the outstanding loan this is much cheaper than the market price and benefits the buyers and investors in a big way.
The buyer can check for the market price to understand the difference. Non-FHA financing and cash purchases are most often used for properties with the disposition of UI. Once the initial offer to owner occupants expires, HUD homes become available to anyone, include investors looking to buy HUD homes and flip them, or buyers looking to rent the properties for extra income.
For that reason, real estate investors should always account for the costs of repairing the house when making a budget for the purchase. Due, in large part, to the unpredictable nature of contracts, the HUD will review backup bids before they put the property back on the market.
Your uncle is not a lone; most real estate agents are not experienced in HUD foreclosure listings. The homes that qualify for a FHA 203K Mortgage need to be at least one year old and the cost of the needed repairs used be at least $5,000, but that no longer apply.
HUD’s website offers an easy to use search engine to navigate through the vast amount of properties. There are less VA foreclosed homes on the market than HUD homes because there are less VA guaranteed veteran loans than FHA loans. The purchase offer is in the form of a sealed bid.