A HUD home is a foreclosed property which was previously financed by and FHA-Insured mortgage.  After the previous owner defauted on his mortgage, the lender submitted a claim against its HUD insurance and was paid for the loss (the defaulted loan). In exchange, the lender deeds the home to HUD, who is now offering the property for sale through competitive bidding.  Home buyers cannot deal directly with HUD for the purchase of a HUD home.  HUD insists the buyer work with a licensed, HUD-Certified real estate Broker, like Michael Haritos.  Michael is in the top 5% of Realtors in Delaware who consistently find great homes for his foreclosure buyers.

DelewareHudHomes.com is designed to provide you with the professional assistance to make your home selection, to secure mortgage approval, and to present a bid on the best available HUD property.

Anyone who qualifies for a mortgage can have the opportunity to purchase a HUD property.  Your income, cash on hand, and your credit will determine what type of program you can use to finance your new home.  HUD homes can be purchased for cash, but many buyers choose new FHA-insured mortgages, VA home loans, or conventional loans.  Your mortgage specialist will help you decide which type of loan will offer you the greatest benefits.  Please note the HUD requires home buyers be pre-approved prior to making a bid for any HUD owned property.   You may use any qualified lender.  Click here to contact Jane deFord with Capital One Mortgage, a HUD lending specialist, to begin the loan process or ask any questions. 

FHA loans require approximately 3 1/2 % of the sales price for a down payment, plus customary closing costs.  Some conventional loans can be secured for NO money down.  Talk to your lender for more details.  The huge benefit of purchasing a HUD home is the government will pay some or all of your closing costs!!!  Ask your HUD-Certified Realtor, Michael Haritos, for details. 





Frequently Asked Questions


What is a "HUD home" ?
When someone with a HUD insured mortgage can't meet the payments, the lender forecloses on the home.   HUD pays the lender what is owed and takes possession of the property.  All properties are required to go out "for bid" to ensure that HUD gets the highest return possible on the property.  These homes are sold at fair market value, less any necessary repairs.  The winning bid will be the one that will deliver the highest NET return to HUD at the closing table.    The local FHA Office acquires hundreds of properrties each year in the state of Delaware.


Who can but a HUD home?
Anyone!  If you have the cash or can qualify for a mortgage, you can buy a HUD home.


Are HUD homes meant for people with low incomes?
HUD homes range in price, but most are affordable for low and moderate income Americans.  You still must have cash available for your purchase and qualify for a mortgage.


How much do they cost?
Anappraiser performs a market analysis on each property before it is listed for sale.  The properties are compared to similar homes in the neighborhood and area.  HUD takes may items into consideration before putting a list price on a property.  Submitted offers may be higher or lower than what is listed.


Is it true you can get a HUD home for a dollar?
NO.  HUD sells homes at market value.


How do I buy a HUD home?
In a nutshell, you must first abtain a mortgage approval letter from a qualified lender, then you may submit a bid.  Michael will assist you in drawing up and submitting the special forms required to make an offer on the HUD home of your choice.  A minimum deposit in the form of a certified check or money order is required before your bid can be submitted.  These funds are returned if the bid is not accepted.   

As noted above, all bidders must have, prior to offering a bid, a "property specific" pre-approval letter from a HUD approved lender.  This letter must have an ink signature and other specific information to be acceptable to HUD.  To obtain a pre-approval letter, all bidders must provide to their lender evidence of regular employment, availability of cash needed to complete the purchase, and an acceptable credit history report.  All information must be provided to your lender in advance so thet they can determine the amount and type of loan you will qualify for.  Click here for a list of suggested lenders.

The HUD process begins as follows:  HUD prepares a weekly list of available homes and publishes the list every Friday morning (available on this web site under the HUD Listings link). Each property is available for inspection for 10 (ten) days, know as the initial offer period.  This initial offer period is for owner occupant purchasers only.  At the end of the initial offer period (11:59PM on the second Sunday), all the submitted bids will be processed electronically.  The bid which offers the highest net to HUD is the offer that will be accepted. 

Should a property not be sold during the initial offer period, the home will remain available on a daily bid basis.  Owner occupants and investors can bid daily on the property now, with the bid period ending each evening at 11:59PM. 


What happens once a bid is accepted?
Winning bids are announced after each bid opening, on the Hooks Van Holm website... Hooks Van Holm is the management company that sells homes for HUD.  HUD gives you 48 hours to send them the necessary paperwork.  Once they review your paperwork, you will be given a settlement date deadline (normally 45 days after the contract is accepted).  The Realtor commission on the sale of a HUD property is paid by HUD, never by the purchaser.


How can I find out what HUD homes are for sale?
Right here! The link to the left, HUD Listings, will bring you right to the page of available Delaware listings.  If you see a home that interests you, please contact us by clicking here, or call Michael Haritos directly at 302.355.1813.  Note that only a licensed and HUD certified Realtor like Michael Haritos can submit bids for HUD acquired properties.


How can I get a loan to buy a HUD home?
HUD does not make loans directly.  Click here to contact Capital One Mortgage to get your loan process started.


Can I purchase a HUD home as an investment?
Most HUD homes are initially offered on a priority basis to owner occupant purchasers.  Following the priority period, unsold homes are then available to all buyers, including investors.


If a HUD home needs repairs, will HUD make them?
NO.  HUD homes are sold in "as is" condition without warranty.  This means the HUD will not correct any problems with the home.  HUD will also not allow you to make any repairs prior to settlement.   You need to make yourself aware of the property condition prior to submitting your bid. 


Is there any thing else I should know about HUD homes?
We encourage every home buyer and home owner to be a wise consumer, so be sure to review all information here on DelawareHudHomes.com, and on HooksVanholm.com.  Also, please feel free to contact Michael Haritos at 302.355-1813 with any questions. 

As with any major transaction, you must use your best judgment in purchasing a home.  All HUD homes are sold "as is" and will require some work.  Foreclosure homes are not for everyone. However, may people feel the homes are priced accordingly, and with a little "sweat" needed to make the necessary repairs could pay in large benefits.






TERMS YOU NEED TO KNOW

Adjustable Rate Mortgage(ARM) - A type of mortgage whose interest rate changes periodically up or down.

Annual Percentage Rate(APR) - Everything fianced in your mortgage loan package (interest, loan fees, points, and other charges) expressed as a percentage of the loan amount (usually above the actual interest rate alone).

Closing Costs - Costs the buyer must pay at the time of closing in addition to the down payment: including points, mortgage insurance premium, homeowners insurance, pre-payments for property taxes, etc....  Closing costs average 3%-5% of the loan amount.  Some closings can be paid by HUD when purchasing a HUD home.

Conventional Mortgage - A type of mortgage not insured by either FHA or the VA.  Down payment can be 0% and up. 
Contingency - A condition put on an offer to but a home, such as the prospective buyer making an offer contingent on the sale of their present home.  HUD will not accept any contingency offers.

Ernest Money - Funds submitted with an offer to show "good faith" to follow through with the purchase.  Ernest money is placed in escrow with the broker until closing, when ot becomes part of your down payment and closing costs.

FHA Financing - Finanacing for a loan which will be insured against loss by the Federal Housing Administration - a part of the U. S. Department of Housing and Urban Development (HUD).  This financing requires a minimum down payment of 2% - 3%.

Home Owners Insurance  - Insurance that protects the home owner from "casualty" (losses and damage to the home or personal property) and from "liability" (damages to other people or property).  This is required by the lender and is usually added to the mortgage payment.

Loan Orgination Fee - A fee charged by the lender for evaluating, preparing, and submitting a proposed mortgage loan (the first point on a mortgage).

Mortgage Insurance(MIP)(PMI) - A charge paid by the borrower (usually part of the closing costs) to obtain financing, especially when making a down payment of less than 20% of the purchase price.

Point- An amount equal to 1% of the principal amount being borrowed.  The lender may charge the borrower several "points" as part of the loan package.  Generally, points lower your interest rate.

Property Taxes - Taxes are based on the assessed value of the home paid by the homeowner for community services such as schools, public works, and other costs of local government.  Taxes are normally added to your mortgage payment.

Title Insurance - Protects lenders and home owners against loss of their interest in the property due to legal defects in title.

VA Loan - A laon guaranteed by the Department of Veterans Affairs against loss to the lender, and made through a private lender.