What does it mean when a house is considered a HUD house?
Written By: admin on June 27, 2009
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What is the criteria for a house to be called a HUD house? Is it because someone didnt pay their taxes or what?
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HUD is an agency of the US government called Housing and Urban Development. When a mortgage is guaranteed by the government (such as FHA) and it is foreclosed, the government reimburses the lender for its loss (if any) and then the government becomes the owner of the foreclosed property.
The specific government agency that most likely ends up owning such property is HUD, thus most government guaranteed mortgages that are foreclosed, then are offered for resale back to the public become known as HUD Repos.
HUD repos are not always the best deal, the sale is “as is” so if there are any serious preexisting conditions they are 100% the buyers problem.
Whereas in a private sale, the Seller is usually liable for any undisclosed defects.
For this reason HUD’s are usually riskier and not necessarily priced any cheaper for the risk.