Common HUD Home Questions & Answers (Click Here to Search for HUD Homes)
Q: What is a HUD Home?
A: A HUD Home is a property that was financed using an FHA mortgage that has gone through the foreclosure
Q: How are HUD Homes different from Bank Owned (REO) Properties?
A: REO Properties are being sold by lending institutions and HUD Homes are being sold by the
US Dept of Housing & Urban Development. HUD Homes do not use the same sales process as bank
owned properties, which can be beneficial to buyers who get frustrated making multiple offers and
waiting long time periods to get an answer.
Q: Can anyone buy a HUD Home?
A: HUD Homes have periods where only owner occupants can make offers, so you will not be
competing against investors. This period is typically after the first bid cycle (30 days on average),
after that investors can bid on HUD Homes.
Q: How do I make an offer on a HUD Home?
A: You don't make traditonal offers, you bid on them. HUD Homes use an electronic bidding
process which requires the use of a HUD authorized real estate brokerage to make the bid
(offer) for you. HUD Homes have bid deadlines typically 11:59 PM EST the day before the bids
are reviewed. You have an answer on the next day on whether or not you are the accepted
contract most of the time.
Q: Are there special programs for buying HUD homes?
A: HUD has a Good Neighbor Next Door Program to encourage homeownership among those
who serve the community as police, firefighters, EMT's and teachers which allows people in these
professions to purchase homes at as much as a 50% discount in the communities they serve
(restrictions apply). There is also the $1 Homes - Government Sales for low income families to
purchase homes for as little as one dollar (restrictions do apply). The Federal Housing
Administration also has a program for Nonprofit Organizations that allow them to save as much
as 30% on the puchase of a HUD Home.
Q: What if the house needs repairs?
A: FHA 203K financing allows you to roll repair costs into the loan. You work with an approved
contractor during the purchase process to make the house exactly the way you want it. Limits for
how much you can put in are based on the appraised value of the home as repaired and a
streamline 203K maxes out at $35,000.
If you have a question that we haven't answered here, please feel free to contact Justin at 602-348-8534 or by email.!