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What is a HUD Home and How Can I Buy One?


Any house can become a HUD Home. If the previous homeowner purchased the house using an FHA mortgage and defaults (stops making payment), the bank will foreclose the property and the US Government will resell it through a bidding process using local Realtors for assistance. That is how a house becomes a HUD Home.


The list of available HUD Homes can be found at


Contact your local Realtor to tour any HUD House that interests you. The agent will have information about bidding deadlines for each type of buyer. Usually, HUD Homes are offered for sale first to local governments and non-profit organizations. Secondly, the house is offered for sale to owner-occupants – those who plan to live in the house as their primary residence for at least one year and who have not purchased a HUD Home is the last 2 years. If there is no winning bid during the owner-occupant bidding period, it will then be available for sale to anyone including investors. HUD Homes may be purchased by any individual, company, HUD-approved non-profit organization, or government entity that can secure financing or pay cash for the property. HUD Homes cannot be purchased by listing brokers, HUD contractors, their affiliates, owners, managers, employees, sales agents, brokers, and family members and business partners.


Often, purchasing a HUD Home can be easier and more economical than other houses in the area. The bidding process is easy, however there are a few important things you should know:


You must bid for a HUD Home through a HUD registered, licensed real estate agent. If you have a real estate agent that is qualified to place HUD bids, you may contact them to place your bid.  If you do not have an agent, the listing Realtor can register your bid for you.


HUD homes are purchased As-Is. HUD will not make repairs to any property.


HUD Homes are required to close within 45 days.


You cannot purchase a HUD home contingent on the sale of another property.


Your Realtor will assist in completing the bidding documentation and upload it to the HUD website. Winning bidders are notified the day following the deadline.


To bid, you will need a prequalification letter from your lender indicating the property address or bid amount. In the case of a cash purchase, you will need to provide proof of funds from your financial institution. Also, you will need to provide an earnest money deposit (EMD), in certified funds made out to your closing office. For bids $50,000 or more, the EMD is $1,000. If the bid is under $50,000 the EMD is $500.



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