You may be in a market in which finding homes to buy is difficult. Or you may want to shop in a neighborhood that is slightly out of your price range. In either case, you can increase your chances of finding the home you want by shopping with HUD (the U.S.Department of Housing and Urban Development.)

By the organization's own definition, HUD is the Federal agency responsible for national policy and programs that address America's housing needs, improve and develop the nation's communities, and enforce fair housing laws.

HUD also underwrites homeownership for lower- and moderate-income families through its mortgage insurance program - the Federal Housing Administration (FHA.) A primary function of the FHA is to provide the mortgage insurance that will encourage lenders to make financing available and affordable for housing purchases. When a homeowner with an FHA loan defaults on a mortage, the home reverts back to the lender who then looks to the FHA to pay off the remainder of the mortgage. The home then ends up in HUD inventory, as part of HUD Homes, a program designed to market the homes through real estate agents and to find buyers.

Homes that have been reposssessed can pose a stigma in any neighborhood. It is in the local economy's best interest for the home to be reabsorbed and occupied as quickly as possible.

Having licensed professional agents market and assist buyers for the homes makes this process easier. And the buyers are in a position to get a bargain - most of the homes are marketed only at the rate of their defaulted loans, making them many times below comparable market value.

The down side is that when a homeowner is forced to lose a home in such a way, neglect and damage may be found in the home. Sometimes, HUD will provide special assistance in the form of repair allowances or low down payments to assure that the home is quickly occupied.

HUD Homes require no special commitments to buy. They may be purchased by any qualified buyers, without regard to the buyer's race, color, religion, sex, or national origin.

With a HUD Home, there is the advantage that you do not have to deal with the occupant of the home. In some areas, a HUD office may accept a counter-offer from you, but if your counter-offer is not accepted, the home goes back on the market. HUD is interested in a quick sale, so the organization is geared to respond quickly to your offer. If you make an offere that is accepted, the home can close in as little as 30 to 60 days.

Again, you must work with a HUD broker. A HUD broker is any licensed REALTOR who is on file with the organization. Some brokers advertise their desire to sell HUD Homes. Finding one shouldn't be difficult. You can call the HUD office for a recommendation. Since the broker's commission is being paid by HUD, the broker's help to you is free.

Some helpful sites to visit:

Housing Counseling Agencies - Government-approved consumer credit organizations

Home Buying Tips - Includes settlement costs and helpful information including a description of a real estate agent, selecting an attorney, securing a loan, and more.

Homes for Sale.

Published: January 21, 1999

Use of this article without permission is a violation of federal copyright laws.