All Forum Posts by: Noreen Eddy

"From this ordeal, I've learned that lenders/underwriters do not necessarily follow set standards for each project and their word is final."

Exactly.

Best of luck!! Good for you for keepin' on!   You'll get your property, just keep moving forward!

We had a HUD FHA 203k house - the lender requirement was ONLY paint that was chipped, cracked, or peeling. So, don't test the paint that isn't damaged. After that, if I were you, I'd test it ASAP and forget the runaround - if you plan on renting or selling later, you'll need to prove that the house was abated or whatever from all LBP.

Yes our FHA 203k did reimburse the cost of LBP abatement - somewhere along the way Sage Acquisitions changed its mind on the number by $500 though, even though they're the ones that produced and signed the document. If I were you, I wouldn't mess around with FHA too much - if it's a really good deal, and it sounds like it is, then do what you need to do to get the house into your hands as fast as possible, and leave the inexperienced lender / FHA / 203k folks in the dust.

Important consideration - are you buying with cash or with 203k / FHA / any bank loan? We had lead paint in our HUD house and let me tell you, HUD and the banks DO NOT JOKE with lead paint. If there is anything that is chipped, cracked, or peeling, you will have to remediate it. However, if it's not disturbing anything, i.e. not chipped, cracked, or peeling... you might not. Depends on your lead inspector. Get a trustworthy one via recommendation.

ALSO. If you are indeed using a 203k or FHA loan, you can get up to $4,000 in lead remediation costs BACK if it is all documented correctly. (At least this existed when we purchased in 2016. Not guaranteed, but do your due diligence). Make sure your lawyer holds them accountable to this. HUD doesn't play fair in the sandbox.

Best of luck!

Had similar issues on our O/O HUD house. We couldn't even test the plumbing. We budgeted for worst case scenario - as is wise to do with a foreclosure that has been unloved and unoccupied - and planned on replacing ALL of the plumbing.

2.5 years later, we've replaced just about all of it. Glad we guessed a high number up front. It was still worth it. Honestly I'd rather have it fixed up front so I know it's been done well - HUD houses are often uncared for even when they were owned (think about it - if you're about to foreclose, do you have the money to upkeep infrastructure?).

If I were you, I would simply budget based on needing to replace all of it.  

Good for you for being determined and taking action!

I agree with above posters - and be VERY AWARE that HUD houses often come with more work than they seem. Between being vacant for at least a year, to being mistreated when they were owned... they're often in rough shape. Think about it - if the previous owner foreclosed, how much did they do to keep the property in tip-top shape? Probably not much.

Also, people are often upset from being foreclosed on. Our HUD house had a plumbing leak - three deliberate holes drilled in the bottom of a basement pipe, equally spaced one foot apart. Cute, right?

Our HUD house involved a string of both renovations and corrections - most repairs that had been done along the way were done as cheap as possible. Don't do that! Doesn't pay you in the long run.

I'd say, bid where you're comfortable but don't overextend - there's always another house!!

Wouldn't surprise me. OO means occupy for a year. We have been in our HUD as OO and I can't say anyone has checked upon us living there. However the consequences are steep (orange jumpsuit anyone?) so hopefully people use some sense and just play fair.

I agree with above posters, make an aggressive enough offer and the bidding won’t even make it to investors!

When you bid against HUD, you bid against a computer. So if your realtor says 89%, he/she is probably right. There's no reason when it comes to bidding with HUD... it's only math. But the good news is, if your offer is rejected today, you can just bid again tomorrow.

Also it looks like you have to owner occupy for the first year on that ("OK to lease after 1st year of ownership.")   I would advise you to consider that along with the condo fees.

Happy bidding!

If you are an owner occupant, you likely have first dibs on bidding, which is immensely helpful!  "Invest Four More" has some great info about the bidding process.  

My hubby & I currently live in our 203k HUD home and are here to say, it is ABSOLUTELY worth it. However, it's not for the faint of heart. Buying from the government is like playing the computer in chess - it's not fair, and it never will be, but once you get the house and get it fixed, you'll be sitting pretty. Put 3.5% down, fix it, refinance to a conventional, and you'll have an enormous ROI.

Know that most HUD houses have been mistreated before they were foreclosed upon, and then unoccupied for at least a year - leaving them in bad shape. Budget for surprises.

Send a message if you have specific questions!  Happy to help!

All good advice above - I do believe HUD is required to winterize it, but that doesn't mean they did it properly. Our plumbing was "winterized" in our HUD house - by the time our plumber turned the water on during the 203k reno, we realized what a terrible job had been done. Never forget that many municipalities / the government will often give their work to the lowest bidder.

Best of luck, keep warm, and like @Kevin Sobilo says, assume the worst and hope for the best!

Hey @Sunny Burns thanks for posting on your FB group.  Derek & I are hoping to attend!  Looking forward.

-N