{"id":18382,"date":"2011-04-28T18:44:13","date_gmt":"2011-04-28T18:44:13","guid":{"rendered":"http:\/\/203krehabnow.com\/?p=18382"},"modified":"2011-04-28T18:44:13","modified_gmt":"2011-04-28T18:44:13","slug":"purchasing-a-hud-owned-property","status":"publish","type":"post","link":"https:\/\/dev203k.orbitwebx.com\/dev203k\/purchasing-a-hud-owned-property\/","title":{"rendered":"Purchasing a HUD Owned Property- Texas"},"content":{"rendered":"

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If you are considering purchasing a HUD owned property in Texas then you found the right place to start.<\/p>\n

HUD owned properties <\/a>\u00a0in Texas are a great place to turn when looking to buy a foreclosure \u00a0for several reasons. \u00a0The first is they are usually very reasonably valued. The second is that HUD itself is a very motivated seller so once your contract is accepted the transaction does tend to move at a nice pace.\u00a0\u00a0The third is that some of the homes are in need of repairs which isn\u2019t a problem because FHA has a rehab loan program<\/a> which can help and as a result you have a fully customized home that’s\u00a0yours.\u00a0 There is one aspect of the bidding process you have to know about\u2026\u2026<\/em><\/p>\n

Buyer Beware! <\/strong>Purchasing a HUD owned property is very different <\/span>than an owner occupied property because they follow a “blind” bidding process. The bidding date is released by HUD, and each buyer submits their best offer-without the knowledge of any other bids. As long as HUD finds the highest offer acceptable, that offer is accepted. HUD also retains the right to refuse all offers.<\/p>\n

Sometimes when you think of your \u201cbest offer\u201d<\/em> you think about bidding over the asking price of the home. This can be especially true with HUD owned properties because HUD will list the home at the current appraised value which can often be a great deal!<\/strong><\/p>\n

There in\u00a0lies the tricky part \u00a0because if you overbid AND you are using an FHA loan for this purchase then your down payment will increase by the amount of your overbid.<\/strong>\u00a0 Let me explain\u2026FHA is part of HUD therefore banks must use the existing appraisal. While this does mean you will not need to purchase a new appraisal it also means that your 3.5% down payment will be based on HUD\u2019s appraised value so essentially you are paying more than the house is worth. So what happens to the amount you overbid?? It also becomes part of your down payment.<\/p>\n

Let’s look at an example:<\/strong><\/p>\n