Did you know that FHA & HUD offers special financing for homebuyers that are purchasing HUD owned homes? This specialty program, known as the HUD REO $100 Down Program offers great terms and only $100 down for all HUD owned homes. For normal houses, the FHA loan program requires 3.5% down payment, not the HUD $100 down program.
This loan is perfect for new first time buyers entering the housing market with little to no money for large down payments. The HUD $100 down program is available in most states across the nation. The HUD $100 Down program makes government-owned foreclosures available for purchase with just a $100 down payment. And, these homes are available with an insured FHA loan for owner-occupants. In addition, monthly payments can be very low thanks to secure fixed 30-year mortgage rates. First-time buyers often find it cheaper to own their own home than to rent.
So, what is the catch to the HUD REO 100 Down Mortgage? The only catch is the property must be a HUD owned home. You can find the complete list of Florida HUD home for sale here. Basically, a HUD home is a home that was foreclosed on and had an FHA-insured mortgage. HUD pays off the losses of the bank or lender and takes the home back to sell, thus recouping their losses.
It is then offered for sale at market value, based on a recent AS-IS appraisal, meaning, and the market value in its current condition. If you find a HUD home you like, a HUD registered realtor is needed to help set up a showing and to make a bid. HUD homes are listed for sale by management companies under contract by HUD. They are listed and sold through a bid process, and any real estate broker registered with HUD may submit an offer and contract to purchase on your behalf. Feel free to contact us if you need a Realtor recommendation in your city, we would be happy to make the connection.
Who can purchase a HUD home? Pretty much any homebuyer that can qualify for a standard FHA mortgage. If you have the income and credit to qualify for a loan, you may buy a HUD Home. HUD Homes are initially offered to owner-occupant primary homes. Following the priority period for owner occupants, first-time buyers, etc… it’s then the unsold properties are available to all buyers, including investors down the road. Questions? Please reach out to FHA Mortgage Source at any time by calling 800-743-7556 or just submit the quick Info Request Form on this page.
Now let’s discuss some of the benefits of the HUD $100 down mortgage.
- The HUD 100 down loan is only for owner-occupied primary residences. The means buyers will not be competing with investors when making a bid.
- The program only requires $100 down payment.
- Up to 3% of buyer’s closing costs can be paid by HUD – the seller.
- The credit underwriting approval process on the HUD REO $100 Down Payment program is the same as a normal FHA purchase loan.
- If the HUD property needs some minor repairs, HUD will allow up to $5,000 of required repairs to be held in an escrow account. If the property is in need of more extensive repairs in excess of $5,000, you can still purchase it using a FHA 203K Renovation loan.
Additional notes about the FHA HUD $100 Down program here in Florida:
- You need an earnest money deposit (good faith deposit) when you make a bid. This upfront earnest money will be held in escrow. This money will be applied to any outstanding the costs the buyer may have. For HUD homes UNDER $50,000, the earnest money despot is $500. For HUD homes OVER $50,000, the earnest money is despot $1,000.00+
- All standard FHA qualifying requirements apply to the HUD REO $100 down program. Buyers will need a stable 2-year job history, 620 credit score and manageable debt to income to be considered. All the basic FHA approval requirements can be found here. The HUD 100 program lender approval is quick and easy, the process generally takes about 15 min to complete.
Many of these homes in outlying locations will also qualify for the 100% USDA mortgage. Interested homebuyers can read all the USDA loan FAQ’s here. Not sure what program is best for you? Contact us today at 800-743-7556 and let’s discuss the pro’s and con’s of each and find the fit for you!
HUD $100 Dollar Down Program 2024