HUD Homes for Sale in PA

HUD Homes in PA: Your Path to Affordable Homeownership

House with a for sale sign and a sign rider that says foreclosureAre you dreaming of owning a home in Pennsylvania? Consider exploring HUD homes, a potential avenue to make your homeownership dream a reality. These homes, previously unable to keep up with mortgage payments, are now government-owned and available for purchase.

Start your journey by browsing foreclosure listings online. This process allows you to enter the realm of homeownership while potentially snagging a great deal. Remember that these homes may require some repairs, so it's crucial to research the market value of similar properties in the area to ensure you're making a wise investment.

Six Steps to Secure a HUD Home in PA

  1. Get pre-approved by a lender: Before diving into the HUD home buying process, secure pre-approval from a lender. HUD mandates this step, as a pre-approval letter must accompany the sales contract for an accepted offer.
  2. Find a HUD-approved real estate agent: HUD markets foreclosed properties through approved agents. Only registered agents can submit offers on your behalf, ensuring a smooth transaction.
  3. Explore HUD Home Store Listings: HUD homes are sold as-is, and the property card reveals critical information. Codes like IN (insurable) and IE (insurable with escrow) help you understand the property's financing requirements.

    HUD homes are sold as is. You will notice that there are three codes listed on the property card.

    IN-Insurable: This designation means that the property meets the standard FHA 203(b) financing requirements.

    IE-Insurable w/escrow: The appraiser has concluded that repairs are required to satisfy the appraisal requirements for an FHA (203B) mortgage. Repairs must not cost over $10,000, with a 10% contingency.

    The maximum escrow amount is determined by the maintenance needed to meet FHA property standards. Repairs must be completed within 90 days of the loan's closing.

    UI-Uninsurable: To satisfy the FHA requirements for an FHA 203B mortgage, the property needs more than $10,000 in repairs. Some uninsurable homes, but not all, may be eligible for an FHA 203(k) loan. A 203(k) loan is an FHA rehab loan in which the cost of repairs and upgrades is incorporated into the loan amount. Search the listings at the HUD Home Store.
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  4. Obtain a pre-approval letter for your chosen home: After selecting a potential home, obtain a pre-approval letter from your lender. This step is essential for a seamless buying process.
  5. Bid on the HUD Home: HUD sells foreclosed homes through a bidding auction. A licensed real estate agent is your key to submitting a bid. HUD may cover up to 3% of seller-paid closing costs.
  6. Complete the loan application (if financing): If your offer is accepted, you will have 15 days to conduct a professional home inspection. The settlement date typically occurs 30–60 days after the accepted contract date.

FAQs About HUD Homes

  • Are HUD homes guaranteed? No, HUD homes are sold without a guarantee. Buyers are encouraged to conduct expert home inspections before making an offer.
  • Are HUD homes cash-only? No, HUD does not limit purchases to cash-only transactions.
  • Does HUD pay closing costs? If stated in the sales contract, HUD may cover up to 3% of the buyer's closing costs.

In Conclusion

Navigating the home-buying process, especially with HUD homes, requires diligence. Enlist the guidance of a real estate agent to ensure a smooth experience. Understand the steps involved, from pre-approval to closing, and keep a close eye on your budget. You can successfully navigate the process and turn your homeownership dream into reality with research and assistance.


Recommended Reading
House Prices in Pennsylvania

Home Buying 101: Essential Resources for First-Time Buyers
Difference Between Mortgage Pre Approval and Pre Qualification
First-time Home Buyer PA Grants
Read more at: Buying a HUD Home