Who Are Financially Qualified Buyers for HUD Home Sales?

Buying a HUD home.

A HUD home is a property that had been financed by an FHA loan and has since been foreclosed upon. After foreclosure, ownership reverts to the federal Department of Housing and Urban Development for resale. There is no difference between a financially qualified buyer for a HUD home and a buyer of any other home.

Significance

A financially qualified buyer for a home has obtained a pre-approval from a mortgage company. Being financially qualified is a prerequisite to entering any real estate transaction.

Function

When bidding on a HUD home, a borrower must be prepared to send in a pre-approval letter from a mortgage company. While HUD does have a user-friendly interface for bidding, bids must be submitted by a licensed real estate professional and accompanied by proof of financial qualification.

Time Frame

Becoming classified as a financially qualified home buyer does not take a long period. Most pre-approval letters can be issued by a loan officer within 24 hours of the mortgage application and after receiving supporting documentation.

References

• HUD: 100 Questions and Answers About Buying a New Home
• HUD: Glossary
• Active Rain: Are Your Buyers Financially Qualified?