How To Buy A HUD Home

Blog Post Image
Real Estate

What is a HUD home? How do I buy a HUD home?

HUD homes are homes acquired by the U.S. Department of Housing and Urban Development (HUD). If a foreclosed home was purchased with a loan insured by the Federal Housing Administration (FHA), the lender files a claim for the balance due on the mortgage. The FHA pays the claim, then transfers ownership of the property to HUD, which sells the home. They are a 1 to 4 unit residential properties that are offed for sale to recover the lose on the foreclosure claim.

HUD homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

HUD homes are priced at fair market value for their location based on appraisal. Teachers and police officers are given a 50 percent discount on HUD homes. Investors often purchase HUD homes to fix up themselves and sell at a profit. HUD homes are sold as-is – HUD is not responsible for repairs and improvements.

HUD foreclosures are sold using a bidding process. There's an Offer Period, during which sealed bids are accepted from agents. HUD accepts the highest bid offered. Unlike conventional home sales, there is no negotiating on price between buyer and seller.

GOOD NEIGHBOR NEXT DOOR –This program is designed to encourage renewal of revitalization areas by providing an opportunity for law enforcement officers, firefighters, emergency medical technicians and teachers to purchase homes in these communities. HUD provides a substantial incentive in the form of a 50% discount on the list price of eligible properties. Bids for properties must be submitted by a HUD registered real estate broker.

You can view HUD listings on their Web site at The HUD Web site lists registered HUD real estate brokers, because only they can show you a HUD property.

For more information on purchasing a HUD home, please contact me at 940-447-5669 or