HUD plans first isle home auctions

Because of a jump in foreclosures,
the federal agency has 24 homes that
it will sell next month

By Rob Perez

If you're looking to buy a home but don't have much spare cash, the federal government may have a deal for you.

For the first time in Hawaii, the U.S. Department of Housing and Urban Development is using an auction to sell homes seized through foreclosure proceedings.

Twenty-four homes - mostly condos - are on the block next month, and people who buy them for their residences can move in with as little as a $500 down payment, according to HUD. The $500 down payment would apply if a Federal Housing Administration-insured loan is used for the purchase. FHA is part of the housing department.

"I think people will find that (the homes) are going to go for pretty good prices," said Jill Hurt, director of HUD's single-family housing division in Hawaii.

She said homes sold in auction typically fetch prices below appraisal values. For some of the Hawaii units, HUD won't even have a minimum bid price.

For deals involving owner-occupants, the agency pays up to 3 percent of the purchase price toward the buyer's closing costs. In most cases, that will mean the buyer will have to shoulder little if any closing costs, Hurt said.

In addition, HUD is providing a $300 credit to help families move into the homes.

Elsie Foster, a real estate agent who manages HUD properties, said people who do their homework - checking what comparable homes are selling for on the open market, for instance - can "get a great deal."

HUD is using an auction because it has a higher-than-usual number of foreclosed homes to sell - not unusual given the record surge in foreclosures Hawaii has had in recent months.

Until about a year ago, the local HUD office usually had no more than four or five properties at any given time to sell, Hurt said.

HUD gets ownership when lenders foreclose on homes that are financed with FHA-backed mortgages.

All the homes are sold in "as-is" condition. Hurt said the majority are in good condition, with some almost like model homes.

Nine of the homes are on Oahu, 10 on Maui and the rest split between Kauai and the Big Island.

For details about the properties, would-be buyers can call 521-0337 or check on the Internet.

HUD auctions

Oahu properties: 5 p.m. Aug. 8 at the Best Western Plaza Hotel, 3253 N. Nimitz Highway
Big Isle properties: 3 p.m. Aug. 7 at 75-5782 Iuna Place, Kailua-Kona
Maui properties: 5 p.m. Aug. 7 at the Maui Beach Hotel, Kahului
Kauai properties: 3 p.m. Aug. 8 at 4156 Rice Street, Lihue

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