Get a foreclosed home for $100 down
A federal program means homebuyers in certain states can buy with a tiny down payment.
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That’s enough for the Department of Housing and Urban Development to approve you to buy a foreclosed home.
The program is available only in certain states, but the $100 down payment is a clear sign that the federal government is getting aggressive, maybe even desperate, to unload the foreclosed properties. Insiders say the government is bracing for a new wave of foreclosed homes that were owned by Countrywide Mortgage, which was bought out by Bank of America. That alone could mean up to 40,000 new foreclosures on the market. (Bing: Learn about foreclosure laws in your state)
Here’s the deal: From now until October 2012, consumers can plop down $100 and buy a HUD-owned foreclosed home. The previous minimum down payment amount was 3.5% of the home’s assessed value. If you buy, you have to live in the residence — that’s to discourage house flippers — and get financing through the Federal Housing Administration.
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A discount on the home purchase isn't necessarily available; HUD says buyers will have to pay the full current list price for the property. According to the HUD website the process has three steps:
1. Find a HUD home for sale — check the department's website for eligible properties.
2. Find a HUD-registered real-estate agent.
3. Find an FHA lender.
HUD will also make the $100 down payment eligible for the FHA 203(k) loan program, which allows borrowers to access FHA loans to repair and renovate run-down homes. A review of the HUD website doesn’t reveal any strict rules on what constitutes a renovation, so homeowners may get wide latitude on money borrowed under the 203(k) loan program.
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The $100 down payment may be especially helpful to first-time homebuyers. But even if you’re not a first-time homebuyer and are just short on cash, the HUD program could be worth considering.
Foreclosed homes owned by HUD in the following states are eligible for the $100 down-payment deal:
- New Mexico
- North Carolina
- North Dakota
- South Carolina
- South Dakota
A previous poster was right when he said EVERY state should be included in the program.
It was one of the best financial moves we ever made.
Anybody else remember the days when the prime rate was going up on a daily basis and borrowers were paying 18% on a home loan?
Put down 100 bucks and then you will pay a bunch of taxes. What another croocked deal!