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Bank Owned/Foreclosure Information

HUD Homes

A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Who Can Buy a HUD Home?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

If you are an evacuee displaced by a natural disaster, you may be eligible to purchase a HUD Home at a discounted price. First responders may also be eligible for certain discounts.

What About Financing?

HUD does not provide direct financing to buyers of HUD Homes. Buyers must obtain financing through either their own cash reserves or a mortgage lender. If you have the necessary available cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. While HUD does not provide direct financing for the purchase of a HUD Home, it may be possible for you to qualify for an FHA-insured mortgage to finance the purchase, which typically requires only 3.5% of the purchase price for a down payment.

In most cases, mortgage lenders require that the subject property is in move in condition. However, if you are interested in acquiring a HUD Home that is in need of repair, you may be interested in applying for an FHA 203(k) Rehabilitation Loan. This loan allows buyers to repair or modernize their new home with a single, low cost loan.

Does FHA or HUD Offer Any Special Discount Sales Programs?

FHA REO properties located in designated Revitalization Areas are available at a reduced sales price to law enforcement officers, teachers, firefighters, emergency medical technicians, nonprofits and local programs.

Fannie Mae

A Fannie Mae home is a 1-to-4 unit residential property which, before foreclosure, had a Fannie Mae insured mortgage in place. These mortgages were typically issued by a bank or major lender, and after the default of the buyer, turned back over to Fannie May; much like a car that was totaled is given back to the insurance company

Who Can Buy a Fannie Mae Home?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a Fannie Mae Home. Fannie Mae homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

What About Financing?

Fannie Mae provides direct financing to buyers of their homes through the HomePath mortgage program. Similar to FHA in many respects, the HomePath mortgage requires only 3% down payment and no mortgage insurance or appraisal.

In many cases, Fannie Mae owned properties will qualify for either the traditional or 203k Rehabilitation loans.

Does Fannie Mae Offer Any Special Discount Sales Programs?

Yes, from time to time Fannie Mae will offer aggressive incentive programs to assist buyers purchasing their properties. It is important to check with your agent to find out about the latest offerings.

Freddie Mac

A Freddie Mac home is a 1-to-4 unit residential property which, before foreclosure, had a Freddie Mac insured mortgage in place. These mortgages were typically issued by a bank or major lender, and after the default of the buyer, turned back over to Freddie Mac; much like a car that was totaled is given back to the insurance company . Of the three government related entities Freddie Mac offers the fewest foreclosures.

Who Can Buy a Freddie Mac Home?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a Freddie Mac Home. Freddie Mac Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

What About Financing?

Freddie Mac does not provide direct financing to buyers of their homes. In many cases, Freddie Mac owned properties will qualify for either the traditional or 203k Rehabilitation FHA loans..

Does Freddie Mac Offer Any Special Discount Sales Programs?

Yes, Freddie Mac will frequently offer aggressive incentive programs to assist buyers purchasing their properties. The program almost always offers a home warranty as well as several other “buyer bonuses”. It is important to check with your agent to find out about the latest offerings.

Bank Owned REO

A Bank Owned REO home is a 1-to-4 unit residential property acquired by a lender as a result of a foreclosure action on a property for which the bank extended a mortgage. Usually these were uninsured mortgages.

Who Can Buy an REO Home?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy one of these homes. Usually, investors and end users are treated the same in the sales process. The format for the sale will vary from vendor to vendor.

What About Financing?

Banks and asset management companies do not usually offer direct financing, although many do require that a buyer be pre-qualified by it’s loan staff. This assists the seller in determining the capability of a potential buyer.

Do Banks Offer Any Special Discount Sales Programs?

Usually Banks and asset management companies offer few incentive and homes are most often sold as is.

Short Sale

A Short Sale is a method of selling your home, with the bank’s approval, for less than you owe. This format has become very popular in recent years with the as many home owners owing more than their home is worth. The seller must obtain permission from the bank before discounting the price and there is a somewhat challenging course of paperwork required.

Rent1 Sale1 Realty can assist negotiation the short sale and with all the paperwork required.

Who Can Buy a Short Sale?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy one of these homes. Usually, investors and end users are treated the same in the sales process. The format for the sale will vary from bank to bank.

What About Financing?

Banks do not usually offer direct financing, although many do require that a buyer be pre-qualified by it’s loan staff. This assists the seller in determining the capability of a potential buyer.

Do Short Sale Sellers Offer Any Special Discount Sales Programs?

Usually there are few incentives and homes are most often sold as is.

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