Arrowhead Escrow Blog

Southern California HUD Homes vs Bank REO Part 3

Hi and welcome back to our final installment of Southern California HUD Homes vs Bank REO. Over the last couple of post we have tried to show how these special homes differ from other Southern California foreclosures.

In this final post we will show how some Southern California HUD Homes are sold with mandatory repairs. As mentioned in an earlier post all Southern California HUD Homes are sold as is. Click here to read more on "As Is".

However some homes are sold with repairs that must be completed by the purchaser if you are obtaining FHA financing. HUD will not make any repairs! Not all homes have this special condition, but some do. HUD will supply a list of repairs that must be completed by the purchaser. All homes with mandatory repairs are clearly marked and easy to spot.

Although it may seem harsh that HUD requires these repairs they do allow you to finance them in to your new loan if you take an FHA loan. This commonly done with a FHA 203b loan with a repair escrow for Southern California HUD Homes. Be sure to work with a lender who is familiar with this program as they are a little tricky as this type of loan is only done on HUD Homes.

Common repairs for these types of homes include; repairs to the flooring, dry wall repairs, siding repairs, replacing the carpet and replacing the appliances.

This is very important

These repairs are completed only after you have taken possession of the property. And the lender must hold the repair money in a side escrow (that is where it gets tricky).

Agents, come back soon for Southern California Training Events to be posted.

--Arrowhead Escrow