Q: I've heard all HUD homes are in bad neighborhoods and need extensive repairs... Is this true?

ABSOLUTELY NOT! In fact, many DFW HUD homes are in nice neigborhoods and have little if any repair requirements.

Q: Who can buy a HUD home? Are they only available for low-income buyers? 

All HUD homes are offered without regard to race, color, religion, sex, national origin, handicap, or familial status. Anyone who is pre-qualified for a mortgage loan may offer to purchase a HUD home. These homes are not exclusively for low-income buyers, but most are regarded as affordable for low to moderate-income purchasers within the market areas where they are located. There is an initial period when only owner-occupants are allowed to purchase, after which time investors may also buy. No employee, relative, or business relation of the M&M Contractor or its subcontractors may purchase any of these properties.

Q: How do I start the process of buying a HUD home?

Start by finding a real estate agent who works for a HUD-registered broker. Be sure to ask if his or her broker is registered with HUD to sell these homes. These agents can help you get pre-qualified for a loan, show the available homes to you, write a Sales Contract for you to sign and place an offer by electronic bid on your behalf.

Q: Does HUD make repairs on HUD-owned homes that are in poor condition?

HUD homes are sold "as is," without warranty. That means HUD generally will not make repairs except to preserve and protect the property or to eliminate a major safety issue. Known defects are reflected in the price and stated in the listing on the Website, as well as on the Property Condition Summary sheet.

Q: The "as-is", "no warranties" part scares me.  How can I protect myself?

First you can look at the Property Condition Summary sheet that I have available for you.  Secondly, if you place a bid that is accepted, you have fifteen days to get your own home inspection by whomever you choose.  As an owner-occupant bidder, you would have your earnest money returned if there is an issue that concerns you.

Q: How do I make an offer to purchase? What happens after I place a bid?

Your HUD-registered real estate agent or broker must place an offer in the form of an electronic bid on your behalf. If your bid offers the highest price, net of closing costs and commissions, above the minimum acceptable price, then the bid will be acknowledged, assuming all other considerations are met. The bid will be the acknowledged bid listed in "Bid Results," allowing your agent or broker 48 hours to deliver a complete contract package to the appropriate Regional Office. The complete and signed Sales Contract package with all addenda, a copy of the loan pre-qualification letter, and your earnest money check. Only when a complete and correct contract package is submitted and received on time will the M&M Contractor sign on behalf of HUD as Seller. Otherwise, your bid may be cancelled and the property may be offered to the next highest acceptable bidder or it may be placed back on the market for others to bid.

Q: Can I buy a HUD home as an investment property?

Yes, however owner-occupant purchasers are given priority for an initial period of time that the house is on the market. These are persons who will affirm in writing that they have not purchased a HUD-owned property in the last two years and they will live in the home as their primary residence for at least one year. After the initial listing period, investors may purchase the houses for resale or for rental.

Q: As an owner-occupant, can my agent bid for me on more than one house at a time?

Yes. If you are the highest bidder on multiple houses, the M&M Contractor will choose the one on which you will be acknowledged as the successful bidder. You will not be able to select which house so make sure that any home that you submit a bid on is one that you are prepared to close on.

Q: Will HUD accept bids lower than appraised value?

HUD has accepted many bids lower than appraised value.  There have also been many bids accepted at or ABOVE the appraised value. It really depends on the individual property and how long it has been available. I will research the published BID RESULTS and BID STATISTICS of each HUD home that has already been sold in the SAME area you want to buy in. After I analyze the numbers I will give you factual information that may help you determine how much to bid.

Q. What can or should I bid?

If you are taking advantage of the "$100 Down Payment Program" then you must bid at least the appraised value (listing price). Otherwise, you may bid whatever you like.  However, it is important to keep in mind that you might be competing against other bids.  All bids are sealed so you do not know that bids, if any, you are up against.  I personally encourage people to bid what they feel comfortable bidding and what they feel the property is worth to them.  Also, HUD has a reserve they must meet on each property.  If your bid is lower than the reserve price, they will turn down your bid.  The reserve is not published.