How to Purchase a Foreclosed Home With Low Income

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The Department of Housing and Urban Development (HUD) provides affordable homes for low- to moderate-income home buyers. HUD manages Federal Housing Administration (FHA) properties that result in foreclosure. All HUD-owned properties were acquired via FHA foreclosures and are priced to sell at fair market value. Through an FHA loan, you can purchase a foreclosed home with low income and a low down payment.

  • Get pre-approved to buy a home. Visit the Ditech and Lending Tree websites to apply for a mortgage loan. Your income, assets and credit rating will be reviewed to determine your home-buying power.

  • Visit the HUD website to locate homes for sale. Select your state and choose your counties of interest. Make a list of homes you qualify for, based on your pre-approval.

  • Locate HUD-approved real estate agents on the HUD website. Schedule an appointment with one to view your selection of homes. Your agent can make arrangements to view the properties of your choice. Having a list of homes of interest will give your agent an idea of the types of properties you desire. Also, your pre-approval will reflect the loan amount for which you qualify.

  • Submit an offer to purchase a HUD home. Discuss the price you are prepared to pay with your real estate agent. HUD will generally accept the highest net offer; however, your bid should include the purchase price, closing costs and repairs.

  • Inform your mortgage lender when you have an accepted contract. You will need to submit items as requested. A mortgage lender will process your loan documents to achieve final approval.

Tips & Warnings

  • Minimize your requests for new credit until your home loan is finalized.
  • Low-income buyers should get a home inspection to avoid costly repairs. Arrange to have your inspection done before submitting an offer to purchase a foreclosed home.

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References

  • Photo Credit house image by Cora Reed from Fotolia.com
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