Where do FHA properties come from?
1. FHA, or the Federal Housing Administration, is part of the
Federal Government's Department of Housing and Urban
Development (HUD). FHA helps homebuyers qualify for mortgage
financing by offering lenders insurance against homebuyer default.
When a homebuyer defaults on an FHA insured mortgage, the lender
may foreclose and take ownership of the home. The lender then
transfers ownership of the home to FHA in exchange for FHA paying
the lender the balance that was due on the mortgage. FHA sells tens
of thousands of foreclosed properties each year using the expertise of
industry experts such as HHN.
2. If I want to buy a HUD property, can I use an FHA loan to buy the
home?Yes! Your lender still needs to qualify you for an FHA insured
loan. Remember, FHA does not make loans directly to homebuyers.
You must go through your lender. However, FHA financing is not
required. We can guide you through available financing
programs, including FHA.
3. Does getting an FHA-insured mortgage help in buying a HUD Home?
HUD may have more attractive downpayment terms on an FHA mortgage
if a borrower is buying a HUD home. Check with us
regarding special terms or homebuyer incentives.
4. Can HUD help if the property I am buying needs some repairs?
Through the FHA, HUD offers Property Rehabilitation Mortgage Insurance,
also known as a "203k loan". In this program a lender sets aside part of your
mortgage in a repair escrow, which you can draw on to make needed repairs.
Talk to your lender about FHA 203k loans, and if one is right for you.
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