HUD Offers REO Homes for $100 Down in Select States Using Non Recourse Leverage

From DSNews:

HUD has approved a program aimed at putting foreclosed homes back into the hands of owner-occupant buyers.

In select states, from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.

The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.

The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.

The states in which this scheme will work:

Denver Homeownership Center’s Jurisdiction:

Arkansas
Colorado
Iowa
Kansas
Louisiana
Missouri
Minnesota
Montana
Nebraska
New Mexico
North Dakota
Oklahoma
South Dakota
Texas
Wisconsin
Wyoming
Utah

Atlanta Homeownership Center’s Jurisdiction:

Alabama
Florida
Georgia
Kentucky
Illinois
Indiana
Mississippi
North Carolina
South Carolina
Tennessee
Caribbean

It goes on:

HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan.

Matt Martin, CEO of Matt Martin Real Estate Management (MMREM), says this is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.

MMREM is under contract with HUD to assist with disposition sales of its repossessed homes. MMREM handles properties throughout 16 states, or about a third of HUD’s REO portfolio.

With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100,” Martin explained.

“MMREM is excited to work with this recent initiative, in a way that it supports putting HUD homes back into the hands of homeowners,” Martin said.