Purchase a HUD owned Home with the $100.00 Down Payment Incentive Program


During the fall of 2011, all HUD owned properties that are under the jurisdiction of the Denver and Atlanta HUD Homeownership Centers are eligible for the $100.00 down payment purchase incentive.  What this means, home buyers in Minnesota, Wisconsin and the additional states under Denver & Atlanta’s jurisdiction can purchase a HUD Owned Property with just a $100.00 down payment.   Purchasing a HUD property could be a great way to reduce out-of-pocket expense, but there are some things you should know first. 

To purchase a home with the $100.00 down payment incentive the HUD Owned Property must be: 

  • Owner Occupied.
  • The Buyer(s) must qualify for & utilize FHA financing.
  • HUD Owned Properties are obtained utilizing the HUD Property Bid Submission Process.
  • Maximum Financing can not exceed 100 percent of the appraised value including FHA’s Up Front Mortgage Insurance Premium. (currently 1 percent of base FHA loan amount.)

The $100.00 down payment incentive can be utilized via standard FHA 203(B) loan program financing or the FHA 203(K) program.  The FHA 203(k) program allows home buyers to purchase and finance renovations.   There are two flavors of the FHA 203(k) loan; depending on the scope of renovation and/or the total cost of the project will dictate which flavor of 203(k) loan is required.

As with any FHA loan, the buyer can negotiate seller contributions to be applied towards closing costs, property taxes & insurance escrows.  In the case of HUD Owned Properties the seller contribution is limited to 3 percent of the sales price when utilizing the $100.00 Down Payment Incentive.  Under the right circumstances a home buyer could purchase a home with just a $100.00 down, but be prepared for more than just a $100.00 out of pocket investment.

HUD Properties listings can be found at www.hudhomestore.com

The HUD Home Store can be searched like any property listings database or Multiple Listing Service (MLS), but only HUD owned properties are available.  Important information about HUD owned properties can be found by clicking on the Property Case Number located to the right of the property photo.   There are several tabs containing information specific to a case number/property.  Of particular importance is the Addendums Tab.   Within the Addendums Tab, there are a variety of reports pertaining to the Bid Process, Property Condition Report, Repair Disclosure and others.  It is recommended to read through the provided reports as HUD Owned Properties are Sold “As Is.”  This means there are no warranties or guarantees when purchasing a HUD Property.

As mentioned above, HUD properties utilize a bidding system that requires that a home buyer submit their bid through a Real Estate Agent / Broker that is certified to submit HUD Property bids on behalf of home buyers.   If interested in purchasing a HUD property it is imperative to closely monitor HUD property listings, be decisive when the right property becomes available to ensure your bid is submitted prior to the listing expiration.

In closing, the $100.00 purchase incentive is a great opportunity to purchase a home with little out of pocket expense, and be prepared to move quickly if you locate a property of interest.  The HUD $100.00 down payment incentive program isn’t going to last forever.  My understanding is the program will last until October of 2012.

For further information, my contact information can be found at www.iLoanJoe.com

Joseph J. (Joe) Harvey – Senior Mortgage Advisor – iLoan Home Mortgage – Saint Paul, Minnesota – NMLS 242632

About Joe Harvey MortgageJoe's Blog

In seventeen year as a Mortgage Professional many things have changed. However, many have remained the same. Today’s exhaustive documentation and underwriting requirements (which are only short of a full cavity search) required of loan applicants since the “Mortgage Meltdown” & Bursting of “The Housing Bubble” are essentially the same requirements when I began my mortgage career in 1995. Overtime technology has improved the speed of mortgage application and approval process (in 1995 it took up to a week to obtain a credit report) , but all in all the loan application/approval process has returned to the basic tenants of making sound lending decisions to applicants that actually can repay their loans. What hasn’t changed over the years, most persons or families aspire to own a home to call their own, make changes as they see fit, overtime gain equity, protect their investment and one day hopefully pay-off their loan before reaching retirement. What I can offer as your Mortgage Professional is my experience, honesty, depth of knowledge of loan programs based on individual circumstances whether Purchasing or Refinancing. Licensed in Minnesota and Wisconsin. Planning to purchase a home and have experienced a financial hardship in the past? First, it is not your fault. Second, I can help if you are willing to follow a plan, and be an active participant in your financial recovery. There is no magic pill or wand to wave; it will take some time (generally three months to a year), but time will pass regardless of action or inaction.

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  1. More and More Homes for Sale are HUD Homes - FHA Foreclosures - The Next Wave Starts Now - March 4, 2012

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