HUD Foreclosure Properties Chattanooga and Hamilton County Financing
Financing Options for HUD Foreclosure Homes in Chattanooga
HUD foreclosures provide many potential home buyers with a great opportunity to own an affordable home because of the many financing options that are available with HUD properties.
Most homes in the Chattanooga area offer the $100 down payment purchase option if the buyer uses FHA financing. This eliminates one of the biggest obstacles to home ownership – the down payment. Even with normal FHA financing, the home buyer must be able to pay at minimum a 3.5% down payment. For a $100,000, that is at least $3500.
With the HUD foreclosure home, the down payment can be as low as $100.
With many properties HUD will pay most of the buyer costs. The details with each property are provided with the property listing. If the buyer uses the HUD closing agent, most of the title attorney fees are paid by HUD. Then many of the remaining costs are paid for the buyer as part of the negotiated sales contract.
Another attractive feature with FHA financing of a HUD foreclosure is that many properties with identified condition issues can in many cases have an approved repair escrow. The repair escrow provides funds for repairs that have been identified by the FHA appraiser. With a repair escrow you select the contractor to complete the repairs and you are reimbursed for the cost of the work.
The key to a successful HUD foreclosure property purchase negotiation and closing is using experienced real estate agent and mortgage loan officer. You should verify that your lender has experience with FHA financing for $100 down payment purchases and for the repair escrow. An experienced loan officer will make a difference in how smooth your closing is and how well you understand the steps required to close out the repair escrow after purchasing your home.
It is also important that prospective buyers who are interested in a HUD foreclosure use an experienced real estate agent who has been trained to negotiate HUD purchases. Important details can be missed in negotiation with HUD. It is more difficult to renegotiate contract terms with HUD purchases than it is with a normal seller.
HUD prefers to use their own contracted closing agent. For Chattanooga purchases, closings are scheduled generally every two weeks. Your loan must be fully approved at least 2 weeks prior to that scheduled closing date. This will allow the lender and HUD, as well as you, the buyer, to review the final loan papers prior to your closing date.
You can find HUD homes for Chattanooga and the surrounding area here. It is highly recommended that you select an experienced real agent to represent you with your HUD foreclosure purchase.
