What is a HUD (Housing and Urban Development) Home?

An HUD home is a residential property recovered by the U.S. Department of Housing and Urban Development as a result of a foreclosure on an FHA-insured mortgage loan. HUD then offers the property for sale to recover some of the loses on the foreclosure claim.

Who is eligible for a HUD home?

Anyone is eligible for a HUD home as long as you have cash or can qualify for a loan. HUD homes are initially offered to people who are buying the home as their primary residence, often referred to as owner-occupant purchasers. Following the priority period for these homebuyers, unsold properties are available to all buyers, including investors. Any mortgage broker registered with HUD may submit an offer and contract to purchase on your behalf.

How do you buy a HUD?

HUD foreclosures are sold using a bidding process, meaning there’s an offer period, during which sealed bids are accepted from your agent. At the end of that period, all offers are then opened. HUD will usually accept the highest bid, or the bid that brings them the highest net. HUD then pays the real estate broker’s commission, if included in the contract. HUD does not, however, finance homes. You’ll need to finance through a financing institution, but be sure your financing is in order before you make an offer. If your bid is accepted, and you do not close on the house, you may lose the money deposit you submitted with the offer. If you have any further questions regarding buying an HUD home or would like to speak to a loan officer.