Many people are familiar with REO (Real Estate Owned) properties sold by the banks, but United States government also sells foreclosed properties (REOs) each and every week.

 

ARE YOU LOOKING

FOR REO PROPERTIES ?

For VA REO Properties: http://www.homeloans.va.gov/pm.htm

For HUD REO Properties: http://www.hud.gov/homes/index.cfm

For USDA REO Properties: http://www.resales.usda.gov


BANK REO Properties are not listed at a central location as lender's have several different methods for disposing of their repossessed homes but here are the foreclosed property websites for  several of the larger banks:

 

Chase: http://mortgage.chase.com/pages/other/co_properties_landing.jsp

Bank of America: http://www.countrywide.com/purchase/f_reo.asp

Premiere Asset Services (Wells Fargo): http://www.pasreo.com/pasreo/public/propertySearch.do

Regions: http://www.regions.com/personal_banking/property_for_sale.rf

U.S. Bank: http://www.usbank.com/cgi_w/cfm/personal/products_and_services/reoPropertiesReq.cfm

Wachovia: http://reo.wachovia.com


How Do Bank REO Properties Become HUD REO Properties?

The Department of Veteran Affairs and the United States Department of Agriculture also have a similar process.

 

The US Department of Housing and Urban Development's (HUD) Real Estate Owned (REO) properties are a result of the Federal Housing Administration (FHA) paying a claim to a lending institution on a foreclosed property which was financed with FHA Insured Mortgage and the lender transferring ownership of the property to HUD. Typically, title to the property is not transferred (or the claim paid) until the previous owner is evicted from the property. Normal, after the home is transferred to HUD the property will go up for auction the their website (shown above).

 

Almost any REO Property you look at will have room for improvement. But the more that needs to be done to a home, the less you’re going to have to pay for it. HUD Homes, because they’re sold in “as-is” condition, can often be a great, affordable opportunity for the fixer-upper. Many are in fine neighborhoods and offer outstanding values. And while some HUD Homes do qualify as “handyman specials,” many are in very good condition.

HUD does not warrant the condition of its properties, but will give you the information it has about the condition of the property you’re interested in. You can use this information in formulating your bid.


The appraisal process is HUD’s primary tool for determining the listing price (recommend starting bid) of the properties. FHA appraisers provide preliminary verification that FHA’s Minimum Property Requirements (MPR) for existing housing and Minimum Property Standards (MPS) for new construction have been met for properties evaluated as “insurable” or “insurable with repair escrow” prior to being listed for sale.
 

Do REO properties qualify for FHA Loans (FHA Mortgage Insurance)?

These definitions are not for Home Owner's Insurance. They refer to the availability an FHA Insured Mortgage.

 

The following definitions shall apply to the mortgage insurability of a property:

 

Statement of Insurability


Insurable: Properties marketed as "insurable" are those that meet FHA's Minimum Property Requirements (MPR) for existing housing and Minimum Property Standards (MPS) for new construction at the time of the appraisal in their as-is condition without repairs being necessary.

Insurable With Repair Escrow: A property that requires no more than $5,000 for repairs to meet FHA's MPR or MPS as estimated by the PCR and as reviewed and determined to be reasonable by the appraiser, is eligible to be marketed for sale in its as-is condition with FHA mortgage insurance available, provided the purchaser(s) establishes a cash escrow to ensure the completion of the required repairs. Purchaser(s) are permitted to include in the mortgage an amount equal to 110% of the estimated cost of the repairs.

Uninsurable: Properties offered for sale "Uninsured" do not meet, in their as-is condition, FHA's MPR or MPS and the cost of repairs identified by the appraiser, to meet MPR or MPS, are estimated to exceed $5,000. Uninsurable properties may qualify for FHA’s Section 203(k) rehabilitation program and, depending upon the scope and extent of repairs needed, the Streamlined (k) Limited Repair Program.

203k Rehabilitation Mortgage Insurance can fill a unique and important need for buyers of "uninsurable" properties. Buyers can borrow the money to make repairs to the property. They repay these funds later, as part of their mortgage. Be aware that 203(K) funds are not available for all houses in all areas.
 

USDA also has some loan programs: Section 502 Single Family Housing Loan Programs

502 Direct Loans
Rural Housing Direct Loans are loans that are directly funded by the Government. The Section 502 Direct Loan Program provides low and very-low income families the opportunity to acquire, build, rehabilitate, or improve single family dwellings in rural areas.

 

Under this program, applicants receive a loan directly from USDA Rural Development. The standard term for a Section 502 loan is 33 years. However, loans may be made for a shorter term, and in some cases for 38 years. Each loan is made at a fixed rate established by the Agency and payment subsidies are available to many (income eligible) borrowers to reduce monthly loan payments.

502 Guaranteed Loans
If your income is too high to qualify for a Section 502 Direct Single Family Housing Loan, you may qualify for a Section 502 Guaranteed Housing Loan. These are loans made by participating lenders, such as banks or credit unions. USDA Rural Development issues a loan note guaranteed to the lender, which enables them to make loans to families that they would otherwise be unable to serve.


These loans are made at a fixed rate of interest for 30 years and there is no limit on seller concessions. The lender may loan up to 100% of the appraised value; therefore, closing costs and repairs can often be included in the loan. Private mortgage insurance (PMI) is not required, but a small one time guaranteed fee is required at closing.

 

Please note that applicants may be eligible for adjustments in annual income. Contact your local Rural Development office for more details.

 

For the most current information visit http://www.hud.gov and http://www.usda.gov

 

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