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I have had several calls recently asking what it means when a HUD Home is listed as Uninsured (UI).
I can understand how that could be read as the inability to obtain homeonwers insurance on a property, so I will try to better clarify the term.
Uninsurable (UI):
- First 5 Days: Owner Occupant Bidders only
- Property does not qualify for FHA financing and typically requires more than $5,000 in repairs or does not meet FHA lending guidelines for other reasons.
- The Initial Bid Review is on the 6th Day. Bids from the first 5 days are opened and reviewed simultaneously, then daily thereafter if a bid is not accepted.
- Day 6: Available to all including Investor Bidders
- Non-FHA financing or Cash required.
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Uninsured Properties Often Start with a Lottery Period
What is the Lottery Period?
Certain property eligibilities allow Good Neighbor Next Door participants, HUD registered non-profit organizations, and government entities to bid on the property prior to becoming available to Owner Occupant bids. These properties, which are usually located in HUD designated revitalization areas, or are in areas determined to be uninsurable, are available in the Lottery period for 7 days.
Properties in the Lottery Period can be found at www.HUDHomestore.com during the Lottery Period even though they are not yet available to "normal" buyers. They will not be in the MLS until the Lottery Period has ended and they are available to Owner Occupants.
Bids are reviewed Monday - Friday mornings, excluding Holidays.
A bid placed on Friday - Sunday will be reviewed on Monday.
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