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Government Foreclosures for Real Estate Investors
by David E. Williams
Government Housing and Urban Development, or simply HUD, foreclosures are available throughout the country. Buying one of these HUD foreclosures is a different process than the normal purchase process from a private seller. The other government foreclosure type is the VA foreclosure, these are the Department of Veteran's Affairs foreclosures.
The Federal Housing Administration is a division of the Department of Housing and Urban Development. Federal mortgage insurance is administrated through this department. Once foreclosure occurs the mortgage company can file a claim with the FHA to pay off the remaining balance on the loan. This agency pays that loan off and the ownership of the property is transferred to HUD department.
VA foreclosures offer a good deal for most people since you aren't required to be a veteran in order to take advantage of this offering.
These homes can be purchased with no money down and with special loan rates. Government foreclosures are set at market rates but special consideration will be made if the property is in bad disrepair. The cost of the needed improvements will be considered in the final price.
When you buy one of these homes, you are buying it as it is where it is. There is no government agency covering the cost of any work that is needed. HUD and the DVA leave you to do the inspection work and make sure you know what you are buying.
HUD websites are linked, not only with foreclosures, but also with each state. By searching the websites, you may access the relevant links in order to locate an approved real estate agent. Remember to find your home before proceeding in your website search. Employed as intermediaries, real estate agents do not deal directly with buyers. For example, the Veteran's Administration uses Ocwen Loan Servicing for services related to their properties.
There is a different method when buying a government foreclosure. Instead of making an offer, you make a bid. The home is placed on the market and there is a period of time when bids are accepted. After the bidding period has ended, the offers are opened and usually the highest bidder buys the house.