buying a hud home: the ups and downs

Our house hunting process was a little unusual.  Because we were looking for a fixer upper, we'd often find ourselves saying things like "the kitchen's too nice," or "it's too move-in ready."  We found several houses we really liked during our search, but they would fly off the market, usually being gobbled up by investors.  So after spending what felt like all of our free evenings and weekends house hunting, we devised a new plan: I would go look at homes during the day with our realtor to weed out the bad ones, and then we'd bring Noel back in the evening if I found one I loved.

This is precisely what happened when we found the house that we ended up putting an offer on.  That morning, our real estate agent and I had looked at three other houses, all of which were too updated, or not a sound enough investment.  After the morning we were having, I was a little skeptical about what would eventually be "our" house, as we drove to it.  

When we got to "our house," our agent opened the door, and I think I may have actually let out a squeal I was so excited.  The house was absolutely perfect for what we were looking for.  Yes, it needed a lot of cosmetic improvements, but the most important thing to me was the condition of the structure, and that bad boy was solid.  It had so much character, and as I walked through the rest of the house, I was sold.  There was only one little problem: it still had to pass the Noel inspection.  And here's the thing about Noel: he has come a long way when it comes to visualizing what a space could look like, but sometimes he still gets caught up on little things that he can't see past.  Because of this, he put the ka-bosh on several houses I otherwise loved throughout our house hunting experience, so to say I was nervous was an understatement.  

When we left the house, I immediately called him, told him all about the hardwood floors, the gorgeous built-ins, the stained glass, and we set an appointment to go back and see it that night.  Aside from showing him the pictures and talking about all the updates we could do, I tried to remain relatively neutral towards the house, because wanted to hear his honest opinion when he walked through it. 

When we got there, I didn't say a word, waiting to hear what Noel's reaction would be, silently praying the ugly linoleum on parts of the floor wouldn't throw him off.  Within 30 seconds, he let out a "this house is AWESOME!" and I breathed a sigh of relief.  He walked through the rest of the house, admiring how sturdy the structure was (even noting that it felt more sturdy than our 2007 townhouse), and by the time we left, he was sold too.  And that, my friends, is when the fun began.  

You see, the house was foreclosed, but it wasn't just any foreclosure.  This house happened to be owned by HUD.  For those of you that don't know, HUD is the US Department of Housing & Urban Development, and when a home has a government insured mortgage (an FHA loan) and it goes into default, once it forecloses, HUD acquires that home.  The beauty about HUD is that the putting in an offer process is different than normal, and for the first however many days, investors aren't allowed to bid.  Since investors aren't in the picture, and the house's needed cosmetic updates would probably scare off the average homeowner, we were able to put in a low bid that eventually got accepted.  

The downside about HUD, however, is that they aren't always the most wonderful to work with, and by that, I mean they can be awful.  The purchase process requires a lot more tedious paperwork, to the point where some agents won't touch HUD homes with a ten foot pole.  Luckily for us, we have the real estate agent of the century (for real - if you're in the Minneapolis area and you need an agent, ours is seriously the smartest & hardest working person I've every met in my life), so she breezed through it all like it was nothing.  

It took a week or two for us to get the signed paperwork back from HUD, but once we did, we were clear to start getting our closing paperwork in order too.  I don't know how we ended up getting such amazing people to work with on our end, but both our agent and our loan officer have been the most wonderful, helpful people ever.  Our loan officer got all of our closing documents together in record speed, and she was clear to close over a week before we were actually supposed to close.  

The week of September 6th rolled around (our original closing date was supposed to be 9/6/13), and we got an email from HUD's closing company.  As it turns out, there was a defect on our title that wouldn't be resolved until after the 6th.  Without getting into too much technical detail, both our agent and loan officer said everything should be cleared up by Monday the 9th, and that we'd be clear to close soon after.

Well, HUD is officially working with what may be the slowest closing company on the face of the earth, because guess what, we still aren't clear to close.  In addition to the title defect, HUD hadn't paid a tree assessment on the property, and the title company still had to perform their tract search.  So, we've been anxiously waiting, meanwhile living up the homeless life.  I can't even begin to tell you how grateful we are for the many family members who have taken us during this time, and offered to take us in.  It's made this transition so much less stressful, and it's been fun getting to spend time with our family (maybe we should be homeless more often - kidding).

Although staying with our family has been great, Noel & I have learned the nomad lifestyle isn't quite for us,  so we are getting anxious to have a home we can call our own.  And once that happens, brace yourself, because you will be bombarded by pictures of our new house.