HUD Homes - Why, What, Where, How and Who

This post is to answer some basic questions about HUD Homes for sale. Many don't quite understand why HUD is selling homes, what the homes are, where can they find them, how can they buy them and who do they need to help them through the process....

So let's get started....

Why is HUD selling homes?: HUD is actually the US Dept of Housing and Urban Development. They are not in the business of acquiring and selling homes. However, they do end up selling homes because HUD administers the FHA insurance program that many first-time homebuyers take advantage of when purchasing a home. FHA is not a lender and it does not make loans, it is simply a program that insures loans that meet the FHA criteria. Therefore, if the borrower defaults on their FHA loan then the insurance program pays off the lender. Since FHA is administered by HUD, they take the home back and then sell it to retrieve as much of their insurance money as possible.

What are HUD Homes?: As explained above, HUD homes are properties that were acquired usually through a defaulted FHA loan. These homes are of varying conditions and are usually for sale below the normal market value.


Where can you find a HUD home?: HUD homes are listed online and with local real estate agents. HUD homes can now be found listed at www.hudhomestore.com, which is a neutral site of the asset manager of HUD and it lists all of the properties available for sale. HUD homes are also listed with real estate agents and can be found listed with all of the other listings of most real estate agents i.e. MLS, Company websites, etc...

How can you buy a HUD home?: HUD homes can be purchased at their asset management site, www.hudhomestore.com The process is not the normal process of purchasing most homes. Offers/Bids have to be submitted online. One thing to remember is that the homes are usually offered to Owner Occupied buyers first for a period of about 10 days or more before Investors or Non-Owner Occupant buyers can even submit an offer. There are also some specialty offers for certain properties to Teachers, Police Officers and other civil servants.

Who can help you through the process?: The offers/bids can only be done through a licensed real estate brokerage that is registered with the site. Therefore, you will need to connect with a HUD approved real estate broker and submit an offer with them. They should have a NAID number which means they have registered and been approved by HUD to submit offers. You will also need the approved broker to show you the property because HUD homes are uniquely keyed and usually do not have a lockbox to access the property. Brokers and Agents have their own set of HUD keys to access all of HUD's properties across the country.

I hope this answered some basic questions about HUD homes and how you can purchase them. I look forward to helping you with any of your real estate needs whether it is purchasing a HUD home or any other property or getting your property SOLD. Contact me TODAY!!