HOLMCO Property Solutions, LLC

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FREQUENTLY ASKED QUESTIONS (FAQs)

What is a HUD Home?
“HUD” is an acronym which stands for the Department of Housing and Urban Development (HUD). When someone with a HUD insured mortgage can not meet their mortgage payments, the lender forecloses on the home; HUD pays the lender what is owed; and HUD takes ownership of the home.  HUD then sells the home at market value through a Marketing & Management Contractor (such as PEMCO LTD). 

Who can purchase a HUD home?
Anyone who can qualify for a mortgage or who can pay cash may purchase a HUD home.  Owner occupants must live in the house as their primary residence for at least one year and may not purchase another HUD home as an Owner Occupant for two years.  Buyers must use a broker or agent who is registered with HUD to place a bid on a property.  HOLMCO Property Solutions, LLC is a HUD registered real estate brokerage firm.

How can I purchase a HUD home?
Start by contacting HOLMCO Property Solutions, LLC to schedule a showing.  Only real estate brokers and agents registered with HUD are able to submit a purchase bid for you.  Normally, HUD Homes are sold during an "Offer Period."  At the end of the offer period, all offers are opened and considered to be received simultaneously, and typically the highest acceptable net bid is accepted by HUD.  If the home is not sold during the initial offer period, you can submit a bid until the home is sold.  Bids can be submitted any day of the week, including weekends and holidays.  Bids will be reviewed by HUD the next business day.  The results from the review of all accepted bids are posted on PEMCO LTD’s website.  It is our responsibility to check PEMCO’s website for accepted bid information. Should you submit a winning bid, HOLMCO Property Solutions, LLC will notify you within 24 hours.

What is the Owner Occupant Period?
When a HUD property is first listed for sale to the general public, bids can be submitted by all potential purchasers; however, it is available to owner occupant purchasers "only" during the initial priority period as specified below.  All bids placed by Owner Occupants that are submitted during this priority period are considered to have been received as though they were received simultaneously.  If there are no acceptable owner-occupant bids on the last day of the priority period, then bidding becomes available to all purchasers on a daily basis, with no priority given to owner/occupant bids.

GEORGIA - 12-day Owner Occupant Priority Period

During the first 12 days a HUD property is listed to the general public, it is available to Owner Occupant Purchasers only.  All bids placed by owner occupants that are submitted from day 1 through day 12 are opened on the 13th day and are considered as though they were received simultaneously. If there are no acceptable owner-occupant bids on the 13th day, then bidding becomes available to all purchasers on a daily basis, with no priority given to owner/occupant bids.  New listings for the owner occupant priority period take place on Wednesday of each week with the first bid download scheduled 13 days later; (the 2nd Monday morning following the Wednesday listing).  Investors are allowed to submit their bids during the 12 day owner occupant priority period; but investor bids will not be considered if there is an acceptable owner occupant bid.  If there are no acceptable owner occupant bids, investor bids will be considered and may be awarded on the 13th day; (the 2nd Monday morning following the Wednesday listing). 

When can an Investor submit a Bid?
When a HUD property is first listed for sale to the general public, bids can be submitted by all potential purchasers (including investors); however, it is available to Owner Occupant Purchasers "only" during the initial priority period as specified above.  All bids placed by Owner Occupants that are submitted during this priority period are considered to have been received as though they were received simultaneously.  If there are no acceptable owner occupant bids on the last day of the priority period, then bidding becomes available to all purchasers on a daily basis, with no priority given to owner/occupant bids.

What is FHA financing?
There are three main types of FHA Financing. More information may be obtained from any mortgage company familiar with FHA Guidelines for the various programs.

(1) 203(b) Regular FHA Loan - Listed as "IN"
• If the Property does not have any mandatory repairs FHA will insure the Loan hence the classification of "IN".

(2) 203((b) - Repair Escrow - Listed as "IE"
• When a property has less than $5000 in repairs to bring it up to Minimum Property Standards, FHA will insure the loan provided the repairs are completed by the Buyer or the Buyer's agent within 90 days from the date of Closing.
• It is a cost to the Buyer that the Buyer can finance and add the amount to the mortgage.
• The Lender monitors and keeps the funds in an escrow account for disbursement on completion of repairs to the Lender's satisfaction.

(3) 203(k) - Rehab Loan - Listed as "203K "
• When the property has more than $5000 in Minimum Property Standards repairs to be done.
• The Lender must obtain an Inspection report from an approved 203(k) consultant and a new appraisal. 

How is the repair escrow amount determined?
The FHA appraiser lists the estimated cost of repairs needed to bring the property up to minimum FHA standards. This amount is then multiplied by 110% and this amount is listed as the repair escrow amount. Example: if repairs total $1,000.00 x 110% = $1,100.00. The Repair Escrow amount will be listed at $1,100.00.  Again, this is just an ‘estimate’ for FHA purposes. 

What if my offer price is higher than the appraised value?
FHA guidelines will limit the underwriter to insuring the loan for the lower of two values; the offer price or the appraised value (displayed as the As-Is Value).  If your offer price is higher than the appraised value, the FHA underwriter will require that buyer(s) cover the overbid amount with a cash deposit.  The buyer(s) will not be allowed to build the overbid amount into an FHA loan.

AVAILABLE HUD PROGRAMS AND INCENTIVES

• A $100.00 down payment option is available for select (FHA insured) HUD properties for purchasers who intend to use the property as their primary residence.  Only properties that are advertised AFTER January 4, 2008 and are not advertised through HUD's Good Neighbor Next Door Program are eligible for this incentive. 

• A $14,000 rehabilitation and repair allowance and/or down payment assistance program available  on select reduced priced properties.

• HUD will pay up to 3% of the property's gross purchase price in customary and reasonable closing costs in the jurisdiction where the property is located. 

   

Should you have any questions regarding the HUD process or wish to view a property or submit a bid, please contact our office at 678-376-0617 or email us at info@holmcosolutions.com and someone will contact you as soon as possible.  You can also search for HUD and other foreclosure properties that are located in other states by accessing the home page of our HUD page link provider (Bid Select) and click on the 'Search Properties' button.  This page can be accessed through any of our HUD county links.  Through our extensive nationwide Broker Network, we can assist you with ANY property that interest you; regardless of location.  We look forward to serving you!