HUD Colorado

hud colorado

FHA is also known as the Federal Housing Administration. It was created to help more families purchase homes. FHA is a layer of the Federal Government that basically insures the bank on private loans that are taken out. FHA is a part of the Department of Housing and Urban Development office (HUD). The main role is to create a buffer and to reduce risk for lenders. A HUD Colorado home is a home that had an FHA loan on the property originally. This property went through foreclosure and is now owned by HUD.

Before HUD homes are listed for bidding, HUD orders an appraisal and an inspection on the home. This inspection and appraisal will put the property into a few different categories based on the condition of the home. Once the home is listed as a HUD property it will automatically qualify for a new FHA mortgage.

A HUD owned property only needs $100.00 down if your bid is won for the exact listing price and if the loan you are using is an FHA mortgage. For example if you are bidding on a home that is listed at $100,000 and you offer $105,000 then you will be required to bring the $5,000.00 to closing. If you offered $100,000 and won the bid you would only put down $100.00. It is important to have an experienced mortgage broker and real estate agent when bidding on these properties. I will help you with this process and make it as simple as possible for you.

Here are a few of the ways a HUD home may be listed:

1) HUD Insurable Property
An insurable property is a home that meets FHA property requirements with minimal repairs needed. The repairs needed must be less than $5,000.00. Offers from buyers using other-than-FHA financing such as VA loans and conventional mortgages can also bid on these properties.

2) Insurable with Repair Escrow
An insurable property with a repair escrow refers to a home that has less than $5,000.00 in repairs needed. It is important to note that the buyer must accept the repair escrow and should add the amount of the repairs to the offer price. When using an FHA loan to purchase this type of property you can include the cost of the repairs in the loan.
The repair escrow is an account established after the closing of the home for the amount needed for repairs. The lender will inspect and distribute the monies as necessary when work is completed. The work must be completed within 30 days of the close of escrow. HUD DOES NOT allow repairs to be made prior to closing without written consent. Doing so could void the contract.

3) Uninsurable Property
An uninsurable property is a home that generally needs extensive repairs and is not eligible for an FHA loan in its current condition. HUD will permit the purchase of these properties with an FHA loan or cash offers only. This type of loan is called an FHA Rehab loan or a 203K. This means that you can finance in the cost of the repairs into your loan up to $35,000.00. This is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required. Basically this will cover almost anything that is not structural in nature.

Eligible improvements:

Repair/Replacement of roofs, gutters and downspouts
Repair/Replacement/upgrade of existing HVAC systems
Repair/Replacement/upgrade of plumbing and electrical systems
Repair/Replacement of flooring
Minor remodeling, such as kitchens, which does not involve structural repairs
Painting, both exterior and interior
Weatherization, including storm windows and doors, insulation, weather stripping, etc.
Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
Accessibility improvements for persons with disabilities
Lead-based paint stabilization or abatement of lead-based paint hazards
Repair/replace/add exterior decks, patios, porches
Basement finishing and remodeling, which does not involve structural repairs
Basement waterproofing
Window and door replacements and exterior wall re-side
Septic system and/or well repair or replacement
maximum mortgage amount for repair or rehabilitation costs from $0.00 to $35,000

To insure a mortgage that covers both repairs costs and the refinance of an existing mortgage The following items remain ineligible:

Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall;
New construction (including room additions);
Repair of structural damage;
Repairs requiring detailed drawings or architectural exhibits;
Landscaping or similar site amenity improvements;
Any repair or improvement requiring a work schedule longer than six (6) months; or
Rehabilitation activities that require more than two (2) payments per specialized contractor

HUD Denver

It is important to remember that FHA is part of HUD. These special rehabilitation programs are used concurrently with HUD. You will typically need an FHA loan to qualify for HUD Denver Home Loan.

The laws and regulations change frequently! It is my job to make sure that you are using your energy to find the house of your dreams for your family, and I will stay on top of the changes and inform you of them. Let me handle the mortgage, while you concentrate on your move!

5280 magazine top mortgage professionalContact Colorado Mortgage Guy

Plum Creek Funding, Inc.
303-818-0699 (Cell)
303-840-0966 (Office)
877-840-0965 (Fax)
vince@coloradomortgageguy.com
10952 S. Pikes Peak Dr., Parker, CO 80138