Buying a HUD Home Could Open the Door to Homeownership
Discover HUD-owned homes, special purchasing opportunities, renovation financing options and programs designed to help owner-occupant buyers.
Get Help Buying a HUD HomeWhat Is a HUD Home?
A HUD home is a residential property acquired by the U.S. Department of Housing and Urban Development following a foreclosure involving an FHA-insured mortgage.
HUD then offers the property for sale through the HUD Home Store. These properties can create opportunities for buyers looking for a primary residence, particularly buyers who understand the HUD bidding and financing process.
Why Consider a HUD Home?
Owner-Occupant Priority
Many HUD homes initially receive an exclusive listing period during which owner-occupants, HUD-approved nonprofit organizations and government entities receive priority over investors.
Potential Closing-Cost Assistance
On many HUD sales, buyers may request HUD to contribute up to 3% of the purchase price toward eligible financing and closing costs, subject to HUD's rules and acceptance of the offer.
Renovation Opportunities
HUD homes are sold as-is, but buyers may be able to use FHA 203(k) rehabilitation financing to combine the purchase of the property and qualifying renovation costs into one loan.
As-Is Pricing
HUD generally prices its homes based on an appraisal reflecting the property's current as-is condition. Some properties may offer buyers an opportunity to build equity through improvements.
Multiple Financing Options
Depending on the property and buyer qualifications, HUD homes may be purchased using FHA financing, FHA 203(k), conventional financing or cash.
Special HUD Programs
Certain HUD properties may qualify for special programs, including opportunities for teachers, law enforcement officers, firefighters and emergency medical technicians.
HUD Homes & First-Time Buyers
You do not have to be a first-time buyer to purchase most HUD homes. However, many of the financing and assistance programs commonly used by first-time homebuyers can also be used when purchasing an eligible HUD property.
FHA Financing
FHA-insured mortgages are popular with first-time buyers because of their relatively low down-payment requirements and flexible qualification standards. Eligibility depends on the borrower, lender requirements and condition of the property.
FHA 203(k) Renovation Financing
If a HUD property needs repairs, an FHA 203(k) mortgage may allow a qualified buyer to finance both the home purchase and qualifying improvements through a single mortgage.
HUD currently offers both Limited 203(k) and Standard 203(k) financing. Limited 203(k) financing can be used for qualifying repairs and improvements of up to $75,000, while Standard 203(k) financing is intended for more substantial rehabilitation.
Good Neighbor Next Door
HUD's Good Neighbor Next Door program offers certain eligible HUD homes located in designated revitalization areas at a 50% discount from the list price.
The program is available to qualifying full-time:
- Law enforcement officers
- Pre-K through 12th-grade teachers
- Firefighters
- Emergency medical technicians
Participants must meet HUD eligibility and occupancy requirements. Availability of qualifying properties is limited.
Ask About HUD $100 Down Opportunities
Certain HUD-owned properties financed with an FHA-insured mortgage may qualify for HUD's $100 Down sales incentive when the property, buyer and financing meet applicable HUD requirements.
Because eligibility varies by property and program availability, buyers should confirm qualification with an FHA-approved lender and their HUD-registered real estate broker.
How Buying a HUD Home Works
Identify available HUD properties in your preferred area.
Evaluate its condition, financing designation and bid deadlines.
Work with a lender familiar with FHA and HUD transactions.
Your HUD-registered real estate broker submits the offer electronically.
If HUD accepts your bid, the transaction moves through HUD's contract and closing process.
What Buyers Should Know
- HUD homes are sold as-is. HUD generally does not make repairs after the sale.
- A home inspection is important. Buyers should consider obtaining an independent professional inspection.
- HUD uses a bidding process. Purchasing a HUD home is different from making an offer on a traditional resale property.
- Deadlines matter. Bid periods and contract requirements must be followed carefully.
- Property eligibility varies. Financing programs and special incentives are not available on every HUD property.
Work With a Real Estate Brokerage Experienced With HUD Homes
Our office works directly with HUD-owned properties and understands the requirements, timelines and procedures involved in HUD transactions. That experience can be especially valuable when you are competing for a HUD home or using specialized financing.
We can help you identify available properties, understand HUD's bidding process, evaluate financing options and prepare an offer that meets HUD's requirements.
Interested in Buying a HUD Home?
Tell us what you're looking for and we'll help you determine which HUD homes and homebuyer programs may fit your situation.
Contact Us About HUD Homes