Do HUD owned homes need a lot of repairs?
Some do and some don’t. HUD owned homes are foreclosed properties and are like all other bank owned homes in that they vary greatly in condition. When a HUD home requires no improvements to receive an FHA loan it is considered to be “insurable”. Any lender offering FHA lending should be happy to make a loan on this property to a qualified buyer. When a home needs less than $5000 in repairs, it is considered to be “insurable with escrow”. This means that the repairs required by FHA can be included in the loan amount and the repairs can be completed after closing. When a home needs more than $5000 in repairs, it is considered to be FHA “unsurable”. This means that the repairs required by FHA exceed $5000 and it requires a FHA Streamlined 203K loan. With this loan you are able to add between $5000 and $35,000 to your loan amount to have the home made compliant with FHA’s condition requirements. Click here for allowable improvements.
