Buying a HUD REO Home for $100 Down!

Yes it can be done – you can buy a HUD REO Home for only $100 Down:

·        $100 Down payments on HUD REO Homes financed with FHA insured financing

·        You have to be an owner occupant – no investors!

·        Must be a full price or higher offer

·        Sales allowances may be available to pay for closing costs, to make repairs, or to pay down the mortgage amount

·        Closing costs and pre-paid items may not be included in the mortgage (FHA pays up to 3% in closing costs and up to 5% to selling agent’s commission when you buy a HUD REO and you don’t have to roll those costs into the your mortgage – NICE!)

·        Also applies to FHA 203K loans (more on 203K loans in a later blog post) with a full price or higher offer

·        If the offer price is greater than the appraised value (the as-is value), you will  have to pay the difference in addition to the $100 down payment (if the asking price is $100,000 and you offered $102,000 you will have to come up with $2,100 – the $2,000 difference plus the $100 down payment)

·        You will have to pay the Up Front Mortgage Insurance Premium (currently $1% of the mortgage amount.  The MIP is similar to PMI on conventional mortgages with a loan to value (aka LTV) ratio of 80%.  Unlike PMI the mortgage insurance premium is paid regardless of LTV

·        You will have to qualify for the mortgage – your credit score needs to be around 640 (also known as a FICO score – you can check your credit scores online  - google it)

It is important to get pre qualified for you loan by contacting a loan officer.  The pre qualification will let you know how much you may be able to borrow and will have to be included with any offer you make on a HUD Home.

Contact Mike today and I will put you together with one of my preferred lenders that can get you pre qualified – it’s easy!

  Your search is over!