How to Buy a HUD Home in South Carolina - By: Zack Habanero

Department of Housing and Urban Development (HUD) residential foreclosures are available throughout South Carolina. The sales cycle for a HUD home is different from traditional home buying from an individual.

What is a HUD Home?

The Federal Housing Administration (FHA) is part of HUD and supplies the federal mortgage insurance. If a home is foreclosed upon and was bought with a FHA insured loan then the lender can file a claim for the balance due on the mortgage. FHA will pay the lenders claim and ownership of the property will then be transferred upon sale of the home.

How Much is a HUD Home?

The value of a HUD home is based on the appraisal and then priced at fair market value for its location. If the home is in need of repairs then the price is adjusted to match the investment the buyer could incur to repair and improve the home.

Who Repairs the Home?

HUD homes are sold as-is and the new owner would become responsible for any repairs or home improvements.

How do I buy a HUD Home?

HUD foreclosures are bought and sold utilizing a bidding process. The bidding starts with an Offer Period where sealed bids are accepted from your agent. At the end of the Offer Period, all the offers are opened and HUD normally accepts the highest bid or one that will bring them the highest net.

If the home does not sell during this period then all bids thereafter are opened as received.

If HUD accepts your bid, your real estate agent is notified normally within 24-48 hours and you will be provided a settlement date which is usually 30-60 days from your accepted contract.

HUD pays the real estate agent or agency up to 6% commission for the sale of the property.

Where Can I Get the Home Financed?

HUD will not and does not finance homes. You will need to arrange for your own mortgage loan financing. Make certain that your financing is in order before you make an offer because if your bid is accepted and you cannot close on the home, you can lose your earnest deposit.

Do I Still Need a Home Inspection?

It is recommended that you have any home you are interested in inspected, whether it is a HUD home or not. This is especially important because if you find that the home is in need of repair, then you will need to include that in the bidding price.

Is it ok to buy a HUD Home for Investment

In the initial offering phase, HUD homes are intended for those who will occupy the property, but investors are allowed to bid if there are no buyers from the initial offering phase.

About the Author

South Carolina HUD Loans and Mortgage Lender New Home Buyer Loan SC

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