Good NestingAsk most people what’s keeping them renting instead of owning, and they’ll probably say this: A lack of money, as they feel that owning a home is something only people with a lot of savings or income can do.
What if it was possible to buy a home without a ton of savings or income, though? And what if this finally helped you “fire” your landlord to become that homeowner you always dreamed of being?
The good news is that it’s definitely possible, and the way to do it is to buy a HUD home. Is a HUD home some form of public housing? Not at all. It’s just a home that the HUD purchased after the borrower defaulted on their FHA loan. And to make back whatever money it invested, the HUD puts that home back on the market at a low price to hopefully find a buyer fast.
Incentives for Buying a HUD Home
If the thought of buying a house below market value entices you, know that the potential savings with HUD homes don’t stop there. To start, the HUD could offer the home for just $1 under its One Dollar Program that sells property at this ridiculously cheap rate after it’s been on the market for half a year.
How about getting a home with just $100 down? That’s another incentive you could enjoy with a HUD home under the agency’s $100 Down Program.
Are you a public servant? Do you work as a firefighter, police officer, emergency medical technician, or teacher? If so, you could get half-off a HUD home’s price through the Good Neighbor Next Door Program.
Another incentive offered with HUD homes is the possibility of a voucher to pay part of your mortgage or housing expenses. This may be offered through the Homeownership Voucher Program.
Lastly, you could snag a steal indirectly through the Non-Profit Program. Community organizations can buy HUD homes at a 30 percent discount. As a service to the community, they’ll repair the homes and put them on the market at an affordable price so low-income families can buy them.
The Good and the Bad of HUD Homes
Are HUD homes perfect? No, as they do have certain aspects you should be aware of. First, know that HUD homes are sold as-is. If you don’t have any money to invest in repairs, this could be a negative. Second, you’ll have to live in a HUD home for at least a year, so it’s not ideal if you’re looking to flip the house immediately. And third, you will need to work with a HUD-approved agent to bid on the home during an auction.
With all of that said, it’s hard to deny the money-saving benefits of buying a HUD home. You can get one at a lower price than the market offers, plus get help with the HUD programs listed above. In the end, you’ll have to decide whether the pros outweigh the cons.
