HUD ..... Buying as an Investor and % off of Listed price ???

8 Replies

I just wanted to put forth and ask those familiar with HUD , if you can purchase the properties listed on HudHomeStore as an Investor ( or has HUD too, done away with allowing the purchase of the properties as an Investor as HomePath has apparently done ) ?

And also, is the price that is listed for a property ever negotiable , Or is it pretty much set in stone , and the price you see, is the price you'll pay to purchase it ?

Thanks for any and all input

HUD has an owner occupant only bidding period, and if the property doesn't sell within that time then it is open to all bidders. If you look at a list of properties on hudhomestore.come you will see this info under "listing period".

What price you'll pay depends on your market - you really are "bidding". They may accept less, or it may go for more, than the listed price. Don't expect a big discount unless it has been up for bids for a long time. HUD usually has a downloadable property condition report available online that can be helpful, although some of them are fairly cursory.

Also, (unless I am way out of touch) you can still buy a "homepath" home as an investor after their owner occupant only period has expired.  There were some loan products that also used the "homepath" name - I think some things about that have changed and some products discontinued - so that may be the source of the confusion

@Michael Dunn

You can purchase HUD and Fannie Mae homes as an investor. Both have different waiting periods before an investor can make a bid. HUD's are determined by the type of property (insured vs uninsured) whereas Fannie Mae is determined by state. All states besides NV are 20 days. NV is 30 (last I checked; I don't work in NV). The only exception to Fannie Mae's owner occupied bidding period is a multifamily that is being sold occupied.

@Jean Bolger

Fannie Mae HomePath loans no longer exist, you are correct.

@Mark Gallagher do you know why they stopped doing HomePath and what, if anything, replaced it for investors? 

@Joe Fairless

Too many cooks in the kitchen at Fannie Mae.. they like to switch things up every few months. They seem to follow the - if it's not broke, break it - method.

All joking aside, I have no idea why they did away with it. My best guess is that it was actually underutilized. Out of 150-175 HomePath sales a year, we probably only saw ~5 HomePath loans. The next closest thing is HomeStyle loans. But I'm no expert in them. 

Jean, Mark and Joe,

Thank you all for replying to and contributing to the thread. I really appreciate it

I did have some questions regarding the HUD and HomePath properties, and buying these as an Investor please.....

Questions:

1. What % down do you have to put , to buy a HUD or a HomePath listed property ?

I'm assuming it's 20% down ? Or is there a way to purchase these properties with having to put less down .... 5% ? 10% ?

2. To have a likelihood of getting a listed property on HUD Homestore at a " Big " discount , what is the average listed range that a property usually has to be listed for , before a Likely discount can be had ... over 30 days listed? 45 days ? 60 days ?

3. I see that on HUD homes .... any property with an Exclusive by it ,is open to all buyers ( Investors included ) ?

4. How long until a listed property becomes open to Investors.... is it up to 15 days of being listed ( as HomePath is ) for a listed HUD property ? Wondering this because... there's a property that shows a List Date of 7/21/2015 , and the property has already been reduced in price on today's date of 8-11-2015 ..... which is less than a 30 day period, but yet the property has already had a price drop

5. Does Insured ( IN )  vs  Insured Escrow ( IE )  vs  UI ( Uninsured ) mean , as far as the difference between the three ?

If a property is listed as Uninsured, then this means that the property will NOT qualify  for any type of repair financing ( 203K ) ?  And if not, then how would you get the money for the repairs.... Have to pay for them out of your own pocket OR do the repairs yourself after you purchase the property?

6.  Say a property needs $10,000 in repairs, and you don't want to add on any financing for the repairs to the loan ( 203 ) ..... will you still be able to purchase the property and then after closing/ you own the property , you can then do all of the work yourself if you wish to do so ?

The properties are sold As-Is , so it seems that it's up to the buyer as to whether or not they want to add any costs to the loan for repairs ?

7. I noticed that HUD doesn't " Show " how many days a property has been listed ... you pretty much have to do your own due diligence and add the days up , from the date the property wwas listed, up until that day that you're looking up a property.

This is where having a qualified HUD agent can really help you out , in that they can notify you as soon as....

1. A property goes into the Extended period ( open to investors )

2. When a property hits those Key days on the markets ..... 30, 45 , 60  ( and thus a better chance of getting these properties at a discount )

3. When a property is Reduced in price

8. What does " Bid Open Date " reference on the HUD properties ?

9.  What does Period Deadline mean on a Property?  There is a property I am looking at , that has the date of  10/15/2015  listed under the  " Period Deadline "  ?

Thanks so much again for all of the help and input , Really appreciate it

Several  of your questions can be answered by going to the Help page on the hudhomestore.com site. Just read through the FAQs and you'll have a good sense of how it works.

The amount of your downpayment really has nothing to do with the fact that the property is being sold by HUD. HUD does not issue loans, they just currently own the house. You'll be applying for a mortgage through a lender, and only that lender can tell you what their particular underwriting rules are.

You can't bid on a HUD home on your own, the bid has to be submitted by a real estate agent who has registered with HUD. So the best thing for you to do would be to call around and find one of these agents- they'll be able to answer more questions than I could, I'm sure

Jean ,

Thank you for your reply and advice

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