AboutJim Root Expertise Can inform on "What exactly IS a HUD Property & can one purchase one of these Homes at BARGAIN PRICES'?" Can answer questions with regard to using a variety of FHA-Insured Loan Programs for the purchase of HUD-Owned properties--the "Traditional" FHA Mortgage, the "203B," as well as two "Special" FHA Loans, the 203K & Streamline 203K. The 203B is used to purchase properties that meet FHA's Minimum Property Standards & the 203K & Streamline "K-Loan" are "Renovation Loans" that can be used to purchase & repair all in one loan package! Can provide GENERAL information on HUD property sales procedures, and the procedures used by VA & other Agencies that may put "Foreclosed Properties" on the market! Cannot give legal advice or opinions, nor serve as rhe Questionners' "Agent," but can "point the Questioner in the RIGHT DIRECTION for special guidance & assistance" with a HUD(or other "Foreclosed") Property purchase! My Research Assistant, Gale, shown here with me, is a former Licensed Realtor.
Experience Over 30 years as a "Real Estate Professional," including working as a Licensed Realtor, Residential Appraiser & Morgage Banker in the "Private Sector" and serving as a GS-12 Realty Officer with HUD/FHA for over a decade! Worked as Deputy Chief of the HUD Property Sales Division in Alaska and as Chief FHA Appraiser for HUD's Washington State Jurisdiction.While with HUD/FHA was trained & qualified as an FHA Loan Underwriter, Construction Analyst, Review Appraiser & Property Sales Specialist! Have worked in the Real Estate Markets in Alaska, Washington,Idaho,& Oregon over the past 30 years! Am familiar with "Other Markets" via continuous research!
Organizations Former Member of National Association of Realtors(NAR) & Society of Real Estate Appraisers (SREA)Currently a member of Mortgage Bankers Association of America (MBAA) & National Association of Review Appraisers & Mortgage Underwriters (NARA/MU)
Publications Articles published in various National, Regional & Local Real Estate-related magazines, booklets & newsletters. Co-authored several HUD/FHA Handbooks and numerous Marketing Materials while with the US Government Housing Agency!
Education/Credentials Associates Degree with emphasis on Real Estate,Bachelors Degree in Mass Communications & Masters Degree in Education/Teaching. Numerous private sector & government-sponsored Real Estate-related Courses over the years!
Awards and Honors Numerous Awards & Honors for Realty Marketing & Sales while a Realtor,"Outstanding Performance Awards" annually while with HUD/FHA. Earned the following Professional Designations: "Certified Residential Originator" (CRO) from the MBAA; "Registered Mortgage Underwriter' (RMU) and "Certified Review Appraiser" (CRA) from the NARA/MU.
Expert: Jim Root Date: 6/16/2008 Subject: Insured with Escrow
Question When buying a HUD home that is insured with escrow where exactly is that money coming from? Does any money for the repairs come out of the pocket of the buyer? Does it get tacked on to the mortgage loan? Do the buyers have to pay that money at closing, or is HUD responsible for providing the money to make the necessary repairs to the home?
Answer Lacey--
When a HUD Home is listed as "INSURED-Repair Escrow" it means that one can purchase the property with FHA-Insured Financing BUT it doesn't meet ALL FHA "Minimum Property Standards" (MPS) and that funds sufficient to fix whatever needs fixing to bring the property up to MPS must be Escrowed by the Lender. The Listing should tell the Lender & prospective Buyer what work needs to be done and the amount of money that needs to be placed in Escrow at Closing to provide for getting the needed work done within 90 days of the Closing!
The amount of money needed for the "Repair Escrow" is ADDED to the Buyer/Borrowers' loan amount, so the Buyer/Borrower actually pays for the needed repairs. And the Buyer/Borrower--now Homeowner--gets the work done AFTER closing and pays for it out of the "Repair Escrow" Account!
HUD Home purchases are complicated, sometimes confusing, often contradictory! A prospective Buyer/Borrower for a HUD Home needs an EXPERIENCED Realtor AND Loan Officer to help him/her "through the maze"! By "experienced" I mean a Real Estate Agent and a Loan Originator who has worked a number of HUD Home sales before--and is familiar with the problems and solutions that may occur within each transaction with this government agency!
