Disclosures
HUD Homes are Sold "As-Is" with No Warranties
HUD homes are sold in AS-IS condition. Neither HUD, nor any of its contractors (BCB, First Preston, AMS or BestAssets) make any warranties concerning the condition of the property, including but not limited to:
- Mechanical Systems
- Compliance w/ Local Codes
- Dry Basement
- Zoning
- Foundation
- Building Requirements
- Structural
Home Inspections are Highly Encouraged
After the buyer goes under contract, it is strongly suggested that the he/ she schedules a home inspection at their personal expense. Inspection results are for the buyer’s knowledge only, having no effect on the terms of sale. HUD home sales are not contingent on the findings in a home inspection. If deficiencies are identified during the home inspection,whether they were disclosed or not disclosed, lenders have the choice to add an escrow on top of the loan. Escrow amounts are financed by the buyer not the seller.
HUD Homes do not follow State or or City codes
HUD homes are listed and sold following the Federal Guidelines. Therefore, some HUD properties may not meet the local codes and/or may have some zoning code violations. City inspections are not performed prior to placing the property on the market. Buyers need to follow up with the city or the local authority to order inspections and take the necessary steps to bring the property up to code after the buyer closes on the property.
The 10-day rescission period for Home-Owners’ Associations does not apply to HUD homes. Buyers and selling realtors should research the condominium documents before submitting a bid.
No Repairs or Moving into the Property Before Closing
Because properties are sold AS-IS, HUD is not going to repair a property or allow the buyer to do repairs before closing. Whenever a lender calls for repairs, the repairs may not be completed until after closing. Buyers are not allowed to reside in or store personal belongings at the property prior to closing.
Properties on the Market
All HUD properties are listed on www.HUDhomeStore.com and in the local MLS (multiple listing service), whenever possible. Information about the properties, disclosures, number of days on the market, prices or anything posted at HUDHomeStore.com takes precedence over the information in the MLS.
Types of Financing Buyers can use on HUD Homes
Not all HUD properties qualify for FHA financing. Therefore, it is essential that you look at the “Type of Financing” on the listing prior to submitting a bid. Cash, conventional, rural development, or VA loans may be used if the lender qualifies our property.
It does not matter how the properties are listed when using NON-FHA financing; however, buyers are encouraged to look at the escrow and other notes as they may highlight the deficiencies for the property.
FHA buyers should pay particular attention to how the property was listed because the FHA lender for the buyer MUST USE THE FHA APPRAISAL OBTAINED BY HUD.