The HUD Selling Process

Isn’t it about time you bought a HUD Home? Watch these videos and find out more…

When a HUD Home becomes available for sale, it is listed on HUD Home Store (and usually on the Multiple Listing Service). Any real estate broker who is properly registered with HUD may submit contracts for purchase. Brokers are used because of their expertise in the local residential real estate market and because HUD does not have sufficient staff to show properties to prospective buyers or to assist in those other aspects of homebuying normally handled by brokers.

Before FHA properties are publically listed for sale, they are first evaluated to ascertain if they qualify for direct, exclusive sale to units of local government and FHA-approved nonprofit organizations. Generally, these properties are located in designated Revitalization Areas.

FHA REO properties that are not sold under any special programs are listed on HUD Home Store and offered on an exclusive, priority basis to owner occupant purchasers (people who are buying the home as their primary residence). Following the Exclusive Sales Period, unsold properties are then made available for purchase to all interested buyers, including investors, under the Extended Sales Period. Other sales include:

• Bulk Sales: Properties that have been listed for at least sixty (60) days are available simultaneously to both local governments and the general public. Local governments purchasing 10 or more properties are eligible to receive a discounted purchase price. Properties with an appraised value of $20,000 or less that are purchased under the Bulk Sales Program may be purchased for $100. All other properties are sold at a minimum discount of 10 percent off of the appraised value of the property.
• $1 Homes: HUD properties that have been offered for sale for one-hundred-and-eighty (180) days and that are not under a sales contract will be offered for purchase to local government agencies for a sales price of $1, along with applicable closing costs.

Buying HUD Homes

HUD Announces Launch of HUD Home Store

HUD Home Store is the listing site for HUD real estate owned (REO) single-family properties. This new site provides the public, brokers, potential owner-occupants, state and local governments and nonprofit organizations a centralized location to search the inventory of HUD properties for sale. In addition, registered real estate brokers and other organizations can place bids on behalf of their clients to purchase a HUD property. HUD Home Store also includes many informative user-friendly features providing advice and guidance for consumers on the home buying process. FAQs are available online for:

	General Public
	Real Estate Agents
	Members of the Mortgage Industry
	Nonprofit Organizations and Government Entities

What is a HUD Home?

A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

The following information is provided to as an introduction to the process through which HUD homes can be purchased. You can either scroll down the page, or access specific topics through the following topic menu. Additional links provided in the menu to the right provide access to FHA program and policy information for homeowners, homebuyers, and members of the mortgage lending and real estate industries.

HUD HOMES TOPIC MENU

	Buying a HUD Home
	Home Inspections
	Financing
	FHA Special Discount Sales Programs
	Available HUD Properties
	Additional Information

Who Can Buy a HUD Home?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

If you are an evacuee displaced by Hurricane Katrina, Rita or Wilma, you may be eligible to purchase a HUD Home at a discounted price.

FAQ on Homebuying:

Question: I want to buy a home, but I don’t have much money. Can HUD help me?

Answer: Helping people become homeowners is one of the most important thing HUD does. Here are some suggestions:

1. Start by reading our “homebuyer’s kit” – particularly the part about the federal mortgage programs that can help people buy homes. HUD’s FHA has many mortgage insurance programs that can help first-time homebuyers. Also, be sure to read about buying a HUD home – they can be very good deals!
2. Contact one of the HUD-approved housing counseling agencies. They can help you sort through your options.
3. Call your local office of housing and community development or your mayor’s office to see if there are any local homebuying programs that could help you.

Question 2: I’m interested in an FHA mortgage. Who do I see?

Answer: You’ll need to go see a HUD-approved lender

Question 3: I’m thinking about buying a home, but I don’t really know if it’s a good idea for me. Who can I talk to?

Answer: There are HUD-approved housing counseling agencies that can help you decide whether buying a home is right for you. Contact one in your area.

Question 4: How do I know if I qualify for a mortgage?

Answer: There are many different kinds of mortgages available, and qualification requirements vary. The best thing for you to do is shop around – talk to two or three local lenders to find out what kinds of mortgages they have available that could fit your situation. There are a number of mortgage calculators online that can give you some idea about your ability to qualify for a mortgage. HUD offers a good calculator, in our “homebuyers kit.” You also might want to contact ahousing counseling agency. They may be able to direct you to the kinds of mortgage programs that might fit your needs.

Question 5: I’ve heard of the Officer Next Door and Teacher Next Door programs. How can I find out more?

Answer: Teacher Next Door and Officer Next Door have been combined into Good Neighbor Next Door.

Question 6: I’m considering buying a manufactured home. Does HUD have any information about these homes?

Answer: We have lots of great information about manufactured homes in our “homebuyer’s kit,” including an excellent consumer’s guide.

More information about homebuying.

Question 7: I am a Veteran and want to know if I should get a VA Loan or Conventional Loan?