HUD Home Questions and Answers
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What is a HUD Home?
A HUD Home may be a single-family house, a townhome, condominium or other type of residence. The properties were deeded to HUD/FHA by mortgage companies who had foreclosed on FHA-insured mortgage loans. Now HUD must sell these homesâ€”as quickly as possible at market valueâ€”in order to obtain the maximum financial return on its mortgage insurance funds.
Who can buy a HUD Home?
Anyone who has the money or can qualify for the necessary amount of mortgage financing can purchase a HUD Home. You do not have to be low-income or meet any other such limitations.
Can I get a HUD Home for free, or for one dollar?
No. HUD acquires its properties through the foreclosure of FHA insured mortgages. One of HUD's many missions is to maximize return to the FHA insurance fund, which it does by selling the properties at fair market value.
How do I buy a HUD Home?
Our policy is to market acquired properties on a competitive basis with offers being submitted through any participating licensed real estate broker. Local brokers will assist you in the transaction. They can show the property to prospective buyers, as well as answer questions and provide information on the location of parks, schools, shopping, and employment centers.
Are HUD Homes meant for low income people?
HUD Homes come in a variety of price ranges, though most are affordably priced, making them accessible to low and moderate income Americans. What are the income requirements? If you make a cash purchase, there are no income requirements. Otherwise, you must be able to qualify for a particular type of mortgage financing based on established mortgage lending criteria.
How does HUD decide how much to charge for a HUD Home?
The listing price of a HUD property is a price based on the appraised value.
Can investors purchase HUD Homes?
Yes. However, HUD offers its properties to owner/occupants for a period before making them available to investors.
What happens if I can't close the sale within the time permitted by HUD?
You'll probably have to pay fees for an extension of time, usually in increments of 15 days.
Is there any way for me to get advanced notice about homes that will be coming up for sale?
No. HUD Homes are listed for sale in the local multiple listing service (MLS), the Internet at www.hud.gov or ask your broker.
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