Financing a Denver HUD Home Purchase

 Denver HUD Homes for sale

Though HUD itself does not provide financing, there are several ways to finance the purchase of a Denver HUD Home. You can use a standard home loan, an FHA-insured loan, or cash. Keep in mind that when bidding on a HUD-owned home, you will have to prove to HUD that you will be able to make good on your bid in one of these ways.

Non-FHA Financing 
If you are planning to purchase a HUD home with a standard home loan, the loan will not be insured by FHA. When submitting a bid, you will have to include a pre-qualification letter from your lender.

Paying With Cash
If you are planning to purchase a HUD home with cash, you will need to provide your bank statement or a letter from your bank showing that you have adequate funds to complete the purchase if your bid is accepted.

FHA-insured Loans
FHA will not insure a loan for greater than the HUD home’s “AS-IS” appraised value. If you overbid the appraised value of a HUD home, the difference must be paid in cash if you use FHA-insured financing. There are several types of FHA-insured loans:

203(b) Regular FHA Loan (IN)–FHA will insure the loan if the HUD property does not have any mandatory repairs.
203(b) Repair Escrow (IE)–FHA will insure the loan if the HUD property needs less than $5000 in repairs to bring it up to Minimum Property Standards, and the repairs are completed by the buyer or the buyer’s agent within 90 days from the date of closing.
203(k) Rehab Loan (IK or UI)–If the HUD property needs more than $5000 in repairs to bring it up to Minimum Property Standards, the lender must obtain an inspection report from an approved 203(k) consultant and a new appraisal.

Feel free to contact us with any questions you may have about financing a HUD home purchase, or to schedule an appointment to see any HUD home in the Denver area.

Kenna Real Estate 303-955-4220

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