What is the Difference Between a Foreclosure and a HUD Home?
September 25th, 2009
The difference between a HUD home and a regular foreclosure is that the HUD home has already been purchased by the government through the U.S Department of Housing and Urban Development with an FHA loan while foreclosures are owned by the lender who made the original loan on the house on which the buyer defaulted.
You can find good deals on HUD homes if you are willing to put in the work. These properties have been in the government system and are apt to have been mismanaged and neglected as far as maintenance and upkeep. But that is not much different than buying a house that has sat neglected as a foreclosure or been trashed by and angry former homeowner who was evicted during the foreclosure process. You just need to factor the cost of repairs into what you are willing to pay for the property. Very few are going to be turn key, but that does not mean you can not get a good deal. You are just going to have to be willing to do a bit of work to get the home into the condition it needs to be.
To buy a HUD home is not much different than purchasing a foreclosure, except that since you are dealing with the government you need to make doubly sure that all your paperwork is in order with all the t’s crossed and the i’s dotted so that the whole deal does not fall apart. Most important is to make sure that you have an approval for loan commitment from your lender so you are ready to jump when an opportunity arises.
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