How to Purchase a HUD Home

A HUD Home is acquired by the US Dept. of Housing and Urban Development. If a foreclosed home was purchased with a loan insured by the Federal Housing Administration (FHA), the lender files a claim for the balance due on the mortgage. The FHA pays the claim, and then transfers ownership to HUD, which sells the home.

Tips for purchasing a HUD home:

• You must use a HUD registered real estate broker.
• You must be pre-approved for a mortgage.
• Owner-occupied bidders receive first priority.
• HUD offers three types of properties: FHA insurable homes, FHA insurable homes with a repair escrow and homes that are not insurable with an FHA loan.
• You do not have to finance a HUD home with an FHA loan.

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