Purchasing a HUD foreclosed home can provide a low cost way to home ownership for some people. HUD (Housing and Urban Development) homes are those properties that had a mortgage insured by the Federal Housing Administration (FHA), but were foreclosed when the homeowner fell behind on payments. To recoup the loss of taking these homes, HUD offers them for sale via websites controlled by management companies contracted by HUD.
Search
According to HUD, most real estate professionals are authorized to sell HUD homes. Contact real estate brokers in your area and ask if they are HUD authorized. You can also find authorized real estate agents via the Internet by searching for HUD homes followed by entering your city and state in the search box parameters. Be mindful that some of the websites returned in the search engine results pages are informational or promotional in nature. Preserve your privacy by not filling out contact forms; call authorized agents directly for assistance.
Find
Once you have a real estate professional to work with, ask about HUD listings in your area. If a home is of interest to you, schedule an appointment to visit the property. Your agent will likely confirm your ability to buy a home first before showing you HUD property.
Inspect
If you find a home that you like, make an offer. If your offer is accepted, hire a home inspector to examine the property for repairs. All HUD-owned property is sold "as is" and no warranties are offered. Though HUD will not make repairs or fix problems found by the home inspector, you can negotiate for a lower price to cover these costs. HUD can either accept or turn down your offer. You'll make your purchase decision based on anticipated cost of repairs, mortgage payments and other factors.
Tips
HUD does not offer mortgages for homes sold by the agency. You may qualify for an FHA loan or find a lender willing to extend to you favorable financing terms. Firefighters, law enforcement personnel, emergency services workers, teachers, nonprofit organizations and local governments are eligible to buy select HUD homes in designated areas at a discount. Ask your HUD real estate professional which homes qualify. Always have a qualified home inspector check HUD property before signing a purchase agreement.
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