How to Buy a HUD Home

The U.S. Department of Housing and Urban Development (HUD) is a federal agency that insures homeowner mortgages through its Federal Housing Administration (FHA) arm. HUD reimburses lenders for the outstanding amounts owed on the defaulted properties it insures through the FHA. HUD then turns around and puts them back on the market for re-sale to the general public.

When you locate a HUD home you want to visit and/or purchase, remember, it needs to go through an approved broker. In addition, the process isn't first-come, first-served. On the contrary, properties are appraised based on fair market value and then placed on the market for an "Initial Listing Period," during which time HUD will receive offers on the property. Owner-occupant offers, not those from real estate investors, will receive top priority (HUD's mission is to foster homeownership first and foremost). Once the "Initial Listing Period" window closes, which is typically about 10 days, HUD will review the offers and the highest acceptable owner-occupant offer will be accepted. If the owner-occupant offers are absent or unsatisfactory (i.e. the properties have not sold) bidding will be opened up to both owner-occupants and investors.

If you are the winning bidder, you will need to be ready to move fast. In fact, your HUD-approved broker/agent must submit your signed sales contract (on the HUD-9548 form) within 48 hours, reflecting the offer that was made electronically and that became the winning bid. The agent should have all the paperwork you need. Once your contract is submitted and approved, HUD will ratify the contract and schedule your closing date to occur within 30-60 days. Keep in mind that HUD requires an earnest money deposit as low as $500 (for properties that sell for $50,000 or less) that must be supplied to your HUD-approved broker/agent at the time of electronic bidding. This deposit will be submitted to the HUD Closing Agent immediately after your bid is acknowledged as the winning offer.

Download our Mobile App

[itslife]

my dad just got a hud home for me. I wanted it Becauae it reminds me of home. I was reading hud decreases the house by 10% every 30 days .Whrn my dad found the house they were asking 67, 000 it hit 60 days and went to 60, 300 which is the 10% they subtract every month. They usually accept bids of 85-88% rn. This was proven too, my dad offered 50, 000 on the house I wanted it was advertised for 60, 300 that's like 81% or so. they rejected his offer he then offered 55, 000 his bid was accepted, the day after it was rejected . that was a 91% of asking offer. the house will be worth 131, 000 once fixed up* doesn't need much. it also helped that the next time they dropped the price it would be below my dad's offer, and there was no one else interested, which was totally a shocker because it's in a Wonderful area on a Acer of land with a front and back yard a shed ect. it was just a hidden treasure.

[LitvinLaw]

HUD Homes can be quite inexpensive. But there are other benefits of buying them, including getting a full inspection report before you even place your bid. Be very careful to work with someone who really knows what they're doing. You'll need an agent who is able to handle the bidding process for you. Good luck.

[tereseberry]

Definitely the advice that I needed thank you

[mrbreez]

Thanks you're Soo Awesome, for providing this Info. God Bless You.

[ambergillespie]

So if you bid 80% of the purchasing price, do you have to pay that upfront? I'm confused on how that works.

[ElectedOfficial]

How about, how to keep it up? Furnace goes out, need a plumber? Roof leaks? Can you afford a lawn mower, a Gardner? Not good for single or disabled people and w/ small children. Been there done that although there are programs that will assist, other than plumbing. but a place to live

[ThatHowBaconIsMade]

can someone who is on disablity get a hud approved house..?