The Department of Housing and Urban Development, through the FHA, insures many mortgages of home buyers throughout Illinois and the rest of the country. When a home owner with an FHA-backed mortgage defaults, HUD often buys the property at auction and then seeks to recoup its losses by selling the home to the public. Those interested in buying an Illinois HUD home must first find out how to find the homes. Once they find the homes, then they need to learn the special procedure for bidding on a HUD home and obtaining possible financing for a HUD home purchase in Illinois.
Visit the “HUD Homes” page on HUD’s website at Portal.hud.gov/portal/page/portal/HUD/topics/hud_homes. The way HUD lists homes is by utilizing outside real estate management companies. When you click on “Illinois” on this page, it will lead you to the current company that manages Illinois HUD homes. As of October 2010, the link leads to HMB Inc. (TenManagement.com).
Use the management company’s website listings to find Illinois HUD homes that you would like to purchase. Some HUD homes give initial priority to owner-occupants. If you are a real estate investor, you cannot bid on these homes until after a certain initial period. However, if you are a first-time home buyer, this is often the kind of HUD home you should be interested in purchasing. Some homes are eligible for FHA-backed mortgages. These are the types of Illinois HUD homes you should be looking for if you need financing to buy a home.
After finding some homes you might like to purchase, then you need to start the process of bidding. To bid on an Illinois HUD home, you need to find a real estate broker or agent registered with HUD. In fact, most brokers are registered with HUD and can help you bid on HUD properties.
Gather enough money to place a bid. You will need to prepare a certain amount to show that you are placing a serious bid. After using the real estate broker to place a bid, you then wait for HUD to accept your bid to buy the home.
Note: When seeking financing for a HUD home, you should first get a preliminary letter of acceptance from a lender. You then show this to the HUD broker when preparing your bid.
Get the rest of the money and close on the house if HUD accepts your bid. HUD has approved closing agents. Your broker can arrange a closing agent to close on any Illinois HUD properties that you buy. At this time, you will then need to complete the loan documents before closing if you have arranged for a home loan to buy the home.
After closing on the house, you are now the proud owner of an Illinois HUD home. The last thing you will need to do is obtain and file a deed. Get a deed from HUD and then file it in the local recording office where the home is located. You should always file a deed as soon as possible to protect your new interest in the home.
HUD Homes State Listings