Looking to buy a HUD home? FHA recently changed the program around to make it easier for buyers to purchase properties and renovate them. Now buyers can overbid on HUD homes, obtain FHA renovation financing (203K), and they don’t have to bring in the difference!
Heres the deal. For properties that are FHA foreclosures (you can find a list at hudhomestore.com) an appraisal has already been completed on these homes. For buyers obtain FHA financing they are required to use that apprasial. In many cases buyers are offering more than what that home sold for. If they offer more than what that appraisal put the value at and they are obtaining FHA financing buyers would have to bring in the difference. HUD made some changes to the program late in 2013 that now allows those buyers to take out a FHA 203k Renovation Loan and FHA now allows a new appraisal to be completed. What does that mean? Basically, if the new appraisal supports the value the buyer no longer has to bring in the additional cash. They will simply need their 3.5% required down payment. If you find yourself getting ready to bid on a HUD REO give us a call and we can go over all of the different options!
This topic is so important we went to some other industry experts to get there opinion on the topic! Joe Daily Renovation Lending Manager at Amerifirst and David Howard from Century 21 C. Howard comment on the program changes.
Working with home buyers searching for a new primary residence is a totally different game compared to working with investors and rental property. Sure, there are similarities, but what want-to-be home owners care about is different than what an investor cares about. Frankly, for an investor, it’s all about the money and it should be. When someone purchases a rental property they are essentially running a business. If we can help them run a successful business and turn a profit they will likely come back and buy more properties.
There are lots of want-to-be investors out there and the hardest part is getting started. We are going to help unravel the maze. We will also look at long term planning. Often just knowing what needs to happen to acquire the next property and the next one after that is one of the keys to success. Owning rental property can be a great way to build wealth and we are here to help.Visit Jeremy's Blog