HUD: Probably More Amazing Than Most People Know

HUD programsHUD—we throw the acronym around a lot, but what does it really stand for? Okay, the Housing and Urban Development agency for the federal government. But what does that really mean? This is the first in a series of articles meant to help homebuyers make use of the resources that are the HUD.

Brief History

The  HUD was established, officially, in 1965. 3 years later, the Housing Act of 1968 established the Government National Mortgage Association (then known affectionately as Ginnie Mae) in order to use government-backed mortgage securities to expand the availability of mortgage funds for moderate income families.

Through the decades, HUD has worn many hats, everything from securing homes for Native Americans to working with veterans on getting home loans. Today, HUD is perhaps its most diverse ever. Programs sponsored by this agency run the gamut from helping homeowners avoid foreclosure, to transforming neighborhoods, to selling distressed properties, to helping prospective tenants find affordable rentals.

HUD for Homebuyers

HUD offers tremendous resources for buyers, particularly first-time buyers. We can buy HUD homes for (generally) bargain prices. We can use the FHA loan program if we can’t come up with 20% but are otherwise basically qualified to buy. We can shop for a loan, learn about our rights, and access information about homebuyer programs in every state. Best of all, we can access live, human counselors for help with any part of the process.

HUD Homes for Sale

HUD auction homes

Perhaps a lesser known service of the HUD agency is homes for sale. HUD offers government owned listings. These may have come from many sources, including U.S. Customs, I.R.S., and U.S. Marshall seizures. But there are also less dramatic offerings, those that come from Fannie Mae and Freddie Mac. When you visit this part of the HUD website, you choose first if you want a single-family or a multi-family home. Then, you select the collection you’re interested in (I’m drawn to U.S. Customs for some reason. Too many movies, probably.) From there, you either continue by entering the state you’re interested in, or you get information on upcoming public auctions and how to bid. Check out this beach house on Myrtle Beach, for example! 

Fannie Mae/Freddie Mac offerings are foreclosed, government owned listings collected under the HomePath website. You can search them by location, and the listings most often include pictures plus all the relevant information you need to see if the home might fit your needs.

HomePath Advantages

HomePath allows you to search homes, apply for loans, and make offers on homes with the help of your Realtor®. A licensed real estate agent must help with the offer process, just as a licensed mortgage broker will help with the loan. This of course ensures your offer is legal and that its language allows the deal to move forward in a manner that protects you. 

Another great feature of HomePath is the “First Look” program, available to people who already own a home. To quote the website,  HomePath offers owner occupants (homebuyers who will live in the home as their primary residence) an exclusive "first look" at newly listed foreclosed properties. During the First LookTM marketing period, you can make an offer and purchase a HomePath home without competition from investors. Look for the First Look logo to see which properties are still being offered under the First Look marketing period. Pretty great for those homeowners hoping to trade up or downsize by buying a foreclosure, but who don’t like the idea of competing with heavily moneyed investors.

HUD, the Series

We’ll talk more about some of HUD’s more innovative programs in the weeks ahead. In the meantime, visit the HUD website, and talk to your local Realtor® about the agency’s offerings and support in the place you’re hoping to own a home.

Additional Resources

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert