Possibly the most desireable homes right now are HUD owned homes as every buyer is hoping to get a great deal on one of their homes. Plus, owner occupying buyers who buy a HUD owned home with a new FHA loan can receive 2 great benefits--
* Only $100 down
* FHA will pay 3% of the sales price towards your closing costs
However, to receive these 2 GREAT benefits you MUST offer full price for the house! If the house is listed for sale at $150,000 and you offer $140,000 you will have to put 3.50% down on the house and pay your own closing costs!
My second reminder is if you win the bidding on a house and your final bid is above the home's appraised value (which is often it's list price) you will have to put more than $100 down! What the *#@?! Why?
Because HUD/FHA requires you to use that appraisal if the appraisal is less than 6 months old. We can't use a new appraisal. PERIOD!
So, if a house is listed by HUD for sale at $150,000 and it appraised at $150,000 and you win the bidding at $160,000, you now MUST put down an EXTRA $10,000 to buy this home as our loan amount is based on the LESSER of the sales price or appraised value. It sucks! But, it is true.
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