Local agent serves as regional HUD inspector

Rex Harris, broker-Realtor with ERA Rutherford Realtors, 1927 S. Glenstone, sells houses in the local real estate market, and he also conducts inspections for Housing and Urban Development properties in the southwest Missouri region.

HUD houses are those that are fi-nanced with loans from the Federal Housing Administration, but are foreclosed because the owners quit making payments. After foreclosure, FHA-funded houses become HUD properties.

"If FHA was the one that made the loan and it becomes the owner, then they make it a HUD house and let the government sell the house," Harris said. "They're usually fairly cheap, because they usually go for less than what was owed on the house. ..."

The HUD houses are sold by bid, and the government accepts the highest bid from the prospective home buyers.

As a HUD inspector, Harris inspects the home sites after the government takes possession, and what he looks for are things in or around the house that could hurt prospective home buyers.

"Some of them do have structural damage ... but mostly what I look for is safety features, like if it had a hole in the floor or no door on the basement where someone might fall in while they were looking at it, or a well that's uncovered ... is what I'm inspecting for," Harris said.

Harris is also responsible for putting up signs on HUD houses to provide contact telephone numbers for prospective buyers and in case of emergencies.

Most of the time, Harris said, HUD houses sell for 10 percent to 20 percent less than their appraised values, often because they're not always in perfect shape. "Sometimes, you'll find a cracked window or a dirty carpet or something."

When the houses have been up for bid but have not sold, it's at that point that the government will make them available for very low prices often just $1 via programs that have specific guidelines.

"They have to go through a government entity to do that," Harris said, adding that the last two houses he saw that sold for $1 went to the city of Springfield, which in turn worked with other entities and sold the houses for amounts that covered necessary repairs.

First-time home buyers

Harris also specializes in helping first-time home buyers find and finance their own homes. He works with several lenders, but also can help applicants utilize grant monies available for people who've never purchased a home.

Harris said not all grant applicants have to be first-time home buyers if the property they want to purchase is in a specific neighborhood. "Most of my listings are in what's called targeted neighborhoods. They're trying to promote the houses being fixed up, and in those neighborhoods, you don't have to be a first-time home buyer," he said. "And (they) get a four percent grant from the state of Missouri, and I get them an FHA loan with 3 percent down, and I use their 4 percent grant to pay the 3 percent down payment," he said.

For HUD houses, HUD will pay closing costs, and in cases when the grant is used to purchase a HUD house, the home buyers may walk away with a few hundred dollars after the sale. "Most of my customers get $300 to $500 back at the closing," he said.

Harris added that guidelines now allow the grants for new houses that cost no more than about $89,000, but most new houses don't fit the grant categories. For pre-owned homes, the price limit is about $71,300. To qualify for the grants, Harris said buyers have to make less than about $48,000 a year, and also meet other guidelines.

Harris has been in real estate in Missouri for about 16 years, mainly in the Springfield area, he said.

As far as the real estate market right now, Harris said it's a good time to buy a home, and it's been a good time for him in terms of business, but not necessarily just because of the interest rates.

"Most of my customers don't care quite as much about the interest rate as how much a month their payments are," Harris said. Outside real estate, the economy's effect on jobs in other sectors also is affecting Harris' customer base, he added, noting that the majority of his listings are less than $50,000.

"Some of the people that have expensive homes have lost their jobs; they have to sell those more expensive homes and buy a cheaper home," he said. "So they come and buy some of the types of property I have listed. They might go from a $90,000 home to a $45,000 home because they're having to go to a lower paying job."

While he's glad that business is going well for him, Harris is hoping that the job market picks up soon because he doesn't like to see people stuck in that situation.

The economic times also are evident in the number of HUD inspections Harris is doing. Based on figures to date, he said he'll finish up this year with 80 to 85 HUD inspections, compared to last year when he did only about 30 a year.

"I'd say the increase in foreclosures has been because of the economy and the layoffs and some of our jobs going overseas and things," he said.

"I get paid for doing the inspections and putting up the signs ... but I sympathize with the people that's had their house foreclosed because of a job loss."