In half of the US you can buy HUD homes with only $100 down. Unfortunately, Ohio is in the other half.
HUD just reinstated the $100 down program in 2 of their 4 national regions. It appears that they picked the ones with the largest inventory of homes.
HUD homes sold really well in Ohio during the past 12 months. Our inventory is very low. The number of HUD listings decreased from more than 400 HUD homes at the beginning of the year to around 100.
The $100 down program is one of the best incentives for owner occupant buyers. Instead of the regular 3.5% down payment, you only need to bring $100 down on FHA loans. In addition, HUD contributes up to 3% toward your closing costs.
I believe that we won’t see the $100 down program in Ohio anytime soon. We probably don’t need it to sell these homes, anyway.
However, if Columbus home sales continue to dip in November and December (as they usually do), HUD may reconsider and offer this great incentive to help buyers get into a HUD house with only $100.
There are 2 other incentives that make HUD homes more attractive than other foreclosed properties, even without the $100 down payment program:
- HUD houses are offered with repair escrows when you finance with an FHA loan. You don’t have to get a rehab loan to cover minor repairs of less than $5,000. This will save you time, as regular FHA loans tend to close much faster than 203k rehab loans.
- HUD homes are appraised for FHA financing. This means that you don’t have to pay for a separate appraisal. This will save you $300 to $400 and cut the time for loan approval by at least a week or two.
