Columbus HUD Homes

Take a look at Columbus HUD Home property sheets and you will find that there are 3 categories of HUD Homes.  They reflect the overall condition of a property and determine which type of FHA loan can be used.

Let’s begin with HUD Homes in good condition – Insurable Listings (IN). Homes designated as insurable qualify for “regular” FHA loans, also called FHA 203(b) loans. You can even use HUD’s  “as-is” appraisal when you apply for FHA financing. That will save you around $300 in appraisal fees.

The next category is Insurable Escrow Listings (IE).  These HUD Homes may require repairs to meet  Minimum Property Standards “MPS” and qualify for a FHA 203(b) loan. A repair escrow is established at closing which allows the buyer to use additional borrowed funds (above the purchase price) to bring the property into MPS condition. Repairs cannot exceed $5,000 plus a 10% contingency. The maximum repair escrow for a specific HUD home is listed at the very bottom of the property detail page.

HUD’s Management and Marketing Contractors provide the details on repairs needed as well as the estimated cost. As a buyer you have 90 days after closing to complete these repairs. If money is left in escrow after you complete the repairs, you can use the funds to reduce the principal balance of your loan or do additional repairs in the home (with approval from your lender).

If you do not use FHA financing to fund the purchase of your Columbus HUD Home, no repair escrow will be established.

Finally, there are Uninsurable Listings (UI). These HUD homes need more than $5,500 worth of repairs. Here you may apply for a rehab loan, such as FHA 203(k) or the new FHA 203(k) Streamline financing. The lender will order an “as repaired” appraisal based upon repair estimates supplied by your contractors. Your lender can make one loan that includes both acquisition and  rehab monies, if the renovated house appraises for the “as is” value plus the fix-up costs.

Knowing a good FHA lender with 203(k) experience is essential for this type of purchase. Read more about the 203(k) program at http://www.hud.gov/offices/hsg/sfh/203k/203kmenu.cfm  and http://www.hud.gov/offices/hsg/sfh/203k/sfh203kc.cfm

We have a list of approved FHA 203(k) lenders, so don’t hesitate to contact us at the number or email below.

Thanks for reading our Columbus HUD Homes Blog
Posted by: Susanne Novak, ABR, FIS, GRI 
Specializing in HUD Homes, Shortsales, Investment Real Estate
(614) 975-9650

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