Financing a HUD Home is not difficult! You just have to know a few techniques to make for a smooth transaction. As always, Chase Real Estate is here to guide you(the lender) through the different financing options available.
We recommend using a FHA 203(k) Streamline Loan!
1. Most HUD Homes have no power, water or gas activated at home. Some utilities may not be activated due to damage or vandalism. A regular FHA 203(b) loan may be difficult to complete.
2. Appraisals expire. If an appraisal is over 120 days your end lender will require a new appraisal. We have found that the new appraiser will “call-out” items already accounted for in original appraisal and end lender will require repairs made prior to closing. HUD Homes are sold as-is. No repairs prior to closing.
3. No minimum amount of repairs required. (Consultant 203k has a $5,000 minimum)
4. You can use the HUD $100.00 Down Payment Program with the 203(k) Streamline.
5. HUD will allow 60 days to close FHA 203(k) loans.
6. Lead based paint. When purchasing a HUD Home that was built before 1978 and buyer is an owner-occupant it triggers a LBP test. If LBP stabilization is required and exceeds $5,000 buyer will be required to use 203(k) loan. (If you are already working with 203(k) loan the LBP stabilization can easily be added to loan.)