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Your Guide to HUD Homes: Pros, Cons, and How to Buy Them

HUD homes can be a great deal for investors and bargain hunters alike. But how does it work, and are the homes worth the hassle? This guide breaks it down.


[Updated: Jun 11, 2021 ] Apr 07, 2020 by Aly J. Yale

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Pros Cons

• You'll probably get a great deal.

• You won't face appraisal delays, and you'll see a faster closing.

• You'll have part of your closing costs covered.

• Properties are sold as-is and may require some significant repairs.

• There may not be many options to choose from.

• Owner-occupants have first priority, so investors aren't eligible for every property.

• The home could be hard to finance if it isn't FHA-insured.

• Closings can take two months or more.

• You can't make bids or negotiate yourself -- it can only be done through a HUD-approved real estate agent.

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