As real estate agents, we often get asked about HUD Homes. There is a lot of misunderstanding of what HUD homes are, but people usually know that HUD homes have something to do with foreclosures, and think they are some kind of special deal. Well people that think this, are mostly correct.
HUD Homes are essentially foreclosure homes where the mortgages were FHA loans. These are government backed loans by the US Department of Housing and Urban Development. So, when these homes foreclose they are real estate owned by HUD.
The purchase of HUD Homes in Utah is a little bit different than purchasing other properties. HUD homes are still listed on the MLS, but the way offers are made is a little bit different. HUD offers are made by online bids, and then if won, paperwork must be express mailed to HUD. To make a bid on a HUD home, you must use an approved real estate agent.
Typically, Utah HUD Homes are listed for sale on Friday’s. These property’s are managed by an asset management company Michaelson, Connor & Boul, who is responsible for having the property’s secured and inspections done. These inspection reports contain details about the property’s condition and provide information about recommended repairs and escrow balances. These inspection reports are available for review by potential buyers under the property details on the MCBREO website.
When initially listed, HUD Homes are only open for bids by buyers looking to purchase as their primary residences. This bid is open until the following Sunday (nine days later), and is made by the electronic bid.
If there are no bids accepted by HUD, then the property becomes eligible for bidding by all buyers, including investors who don’t intend to owner occupy the home.
Because most of the home loans in Logan Utah over the past few years didn’t use FHA loans, only a small percentage of the foreclosures are HUD homes. Since the end of 2007 the percentage of FHA loans has greatly risen which means we can expect more HUD homes in the future.
Right now Logan Utah has three HUD homes for sale. All of them are inexpensive homes that look like they need some work. All of them have also been on the market for more than two weeks and are available for bidding by all potential home buyers.