A short while back I started noticing properties popping up in the surrounding Victorville neighborhoods with HUD homes signs in their windows. This caused me to revisit HUD homes, and I recently got approved to sell HUD homes in California. I didn’t want to get caught off guard with a client asking about a home for sale that I couldn’t show them — that wouldn’t look too professional. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free What is a HUD home? In a nutshell, HUD homes are properties that were foreclosed upon, which were purchased originally with an FHA insured loan. FHA (Federal Housing Administration) is part of HUD (U.S. Department of Housing and Urban Development), so when these homes are foreclosed upon, FHA pays the bank for their loss and in turn, acquires the property. That is how a HUD home is born. FHA is a whole other topic I might write about in the future but for now I will stick to the HUD homes. HUD Inventory on the Rise When I went onto HUD’s property listing website, I was pleasantly surprised with the amount and the quality of homes that were available. Ten to fifteen years ago, HUD homes were considered to be those that needed to get lots of work done. The homes were usually boarded up, in terrible condition and in undesirable areas. There wasn’t much of an inventory to even bother with, nor to get certified to make offers on. With receding family incomes, more people that purchased homes with FHA financing are finding themselves unable to keep those homes. This is why more HUD homes are coming to the market. Can Investors Buy HUD Homes? HUD prefers that these properties be sold to people that are going to live in them; they want owner occupants. The theory is that a home owner will take better care of a property than a renter. That is just human nature. In fact HUD offers the homes to owner occupants for the first 10 days that they on the market, and if they do not receive an acceptable offer that meets the minimum net they are looking for, they will then offer the house for sale to investors. They will review and consider all offers at that point. So, if you are an investor don’t forget to run past your local HUD listings for new properties that come on the market. HINT: New properties are listed every Friday. I have heard that some properties that were not picked up by owner occupants during the first 10 day period, have sold for half of their value just because they were not on peoples radar. Another cool thing for investors is that HUD does an initial inspection of the home and offers the report free of charge for you to see. They even list the repairs needed to the property in order to bring it back to working order. Clearly this free report is very valuable. Do your Homework! There are many special programs including a $100 down program for owner occupants using FHA financing. Go to your local HUD to see what special programs are available for you. To search for HUD home listings across the United States please visit this link. Good luck in all you do America. I welcome your comments.