Buying a HUD Home

What is a HUD Home? A HUD home is a residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. The residential property can consist of 1-4 units. After HUD acquires the property, it will put it up for sale to cover the loss as a result of the foreclosure.


Who can buy a HUD Home? Almost anyone can buy a HUD Home. If you can afford it with cash or wish to qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are usually offered to people that wish to have the HUD home as their primary residence. First there will be a period where owner occupants (owners that plan to use it as their primary residence). If the HUD Home goes unsold during this period then the home will be offered to all buyers, including investors.

How are HUD Homes sold? Management companies that the HUD has approved of maintain all HUD properties. These properties are listed on Internet listing sites that are managed by these approved companies. Any real estate that is approved by the HUD can help you purchase the HUD property. The real estate company can submit your offer and contract and purchase the home on your behalf. HUD will pay the real estate company based on commission and the contract, if it's included.

Are there any special programs? In some areas properties are for sale at reduced prices to government employees like law enforcement officers, teachers, firefighters, emergency medical technicians, nonprofits and local governments.

Should I get a home inspection? All HUD Homes are sold as-is and have no warranty. HUD does not make repairs and will not pay to correct any problems. Therefore, we encourage you to get an inspection of the home after your offer is approved but before you accept it.

What about financing? Because HUD does not offer financing, many of the HUD homes are available by FHA loans.

Return back to the FHA Mortgage home or the FHA Lending Guide.