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HUD Homes for Sale in Arizona are Full of Picture-Perfect Amenities.

What is a HUD Home?
If a loan insured by the Federal Housing Administration (FHA) goes into default,
the lender must take steps to collect on the loan. This may result in the lender
taking possession of the collateral Real Estate. If this occurs, the lender may
submit a claim against the FHA insurance fund and convey ownership of the property to the United States Department of Housing and Urban Development (HUD). HUD in turn sells the property at market value as quickly as possible. MLM III is a Marketing and Management contractor for HUD owned residential properties, 1 to 4 units; we maintain and sell these properties in accordance with HUD guidelines.

How are HUD Homes Sold?
HUD homes are listed on the MLS and on the internet. Brokers registered with HUD and their agents may place bids electronically on these properties on behalf of a purchaser. The bid with the highest net to HUD is selected as the provisional winner subject to receipt of all required documents.

Who can buy a HUD Home?
Any buyer that can secure a loan to purchase real estate, or can pay cash, is eligible to purchase a HUD home. Purchasers must use a broker or agent who is registered with HUD to submit a bid on a property. Purchasers must also have a pre-qualification letter from a lender or proof of cash funds in the amount of, or greater than, the property they are purchasing.

HUD’s “AS-IS” Policy
Even though HUD Homes are Sold AS-IS, Buyers can rest at ease as the homes have been appraised, inspected and checked for termites. HUD makes no representations or warranties concerning the condition of the property, including but not limited to mechanical systems, dry basement, foundation, structural, or compliance with code, zoning or building requirements and will make no repairs to the property. Regardless of whether the property is being financed with an FHA insured mortgage, HUD does not guarantee or warrant that the property is free of visible or hidden defects, termite damage, lead base paint, or any other condition that may render the property uninhabitable or otherwise un-useable. The purchaser is responsible for taking such actions as it believes necessary to satisfy itself that the property is in a condition acceptable to it, of laws, regulations and ordinances affecting the property and agrees to accept the property in the condition at the time of contract acceptance. Purchasers are encouraged to have a home inspection performed to identify any possible defects.

The HUD Bidding Process: The Steps that I follow to ensure your bid is a winning bid and its placed within the time frame allowable.

Accuracy of Bid Submission
The purchaser information entered on the bid must be accurate. If an erroneous
social security number, federal identification number, purchaser, or company name is used in lieu of the actual SSN/FIN, purchaser, or company name your bid may be rendered invalid. The information entered on your bid cannot be changed after it has been provisionally accepted. Submission of false information will result in the cancellation of the provisional bid acceptance and the property will be placed back on the market for competitive bidding or awarded to a back up bidder.

Multiple Owner Occupant Bids
There is a huge misconception about Owner Occupant Bidding. Some "Realtors" will tell you its okay to place multiple Bids for an Owner Occupant, This is False. Owner occupants can only place one bid at a time. Owner Occupant purchasers may only have one accepted offer at a time. If for some reason the provisional bid or contract for an Owner Occupant must be cancelled, you will not be able to submit another bid on behalf of that owner occupant until your cancellation request has been processed. Upon completion of processing, a cancellation letter will be faxed stating the disposition of the earnest money deposit. Submission of bids during this transition period will only cause delay in your client’s ability to place a new bid.

Accepted Bids
If your bid is accepted, (I will be notified via HUD) you are responsible for delivery of the original signed sales contract and addenda to MLM III within 2 business days. Therefore, you must have your Sales Contract and addenda, including your purchaser’s pre-qualification letter or verification of cash funds for a cash sale, prior to submitting your bid. If your sales package is submitted incomplete, your bid acceptance may be cancelled. (These are items I take care of for you-so once the bid is won, because I already have your earnest money in place and the contract signed, I over night it to California to ensure your escrow moves forward).

HUD Houses in Phoenix AZ. The Financing Options:

IN – Insurable – 203(b)
• Properties listed IN appear to qualify for FHA 203(b) financing. There should not be any MPR repairs necessary.

IE – Insurable with Escrow – 203(b) Repair Escrow
• Properties listed IE are eligible for FHA financing with repairs to be completed by the purchaser after the close of escrow. These repairs must be Minimum Property Requirements (MPR) Repairs totaling less than $5,000. MPR Categories include; roof, structural, and mechanical systems, such as plumbing, electric, and heating.
• The cost for the repairs is not paid by HUD; however, the buyer may finance the repair escrow amount in their mortgage. The lender is responsible for inspections of the repairs and authorizing release of funds.
• On the purchase agreement the repair escrow amount is not deducted from the Net to HUD or added to the purchase price on line 3. The repair escrow amount should only show on line 4.
• REPAIR ESCROW ONLY APPLIES TO FHA FINANCING – not cash or conventional transactions.

UI – Uninsurable – Conventional, Cash, or 203(k)
• Properties listed UI generally are in need of extensive repairs and are usually purchased with cash or conventional financing. The only type of FHA financing they may qualify for is a FHA 203(k) loan. 203K FHA financing is a rehabilitation loan for owner occupants purchasing properties that have over $5,000 dollars worth of MPR repairs. Not all UI properties will qualify for FHA 203(k) financing.

In Conclusion:

I know these guidelines and stipulations may seem a tad bit overwhelming to you, its not meant to be, but often times it is. Thus the reason I am here. My job is to ensure you get a home at the best price possible, whether you are an owner occupant or an investor. I know how to navigate the turbulent seas of the HUD World. There is no stupid question, except the one who don't ask. So please, contact me at any time with questions about the HUD Buying Process. I think in the end, you'll find it is much easier to purchase a HUD Home than Bank Owned, Short Sales or Pre-Foreclosure Homes. All of these Homes are being Sold AS-IS but with AZ HUD Home Store properties, you know up front, the value of the home, the properties condition and if Termites were discovered and treated for.

602-321-6188 ~ When You're Ready to Buy ~ Call The Real Estate Guy!


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