How To Buy HUD Foreclosure Homes

Learn how to search for, qualify for and purchase HUD foreclosure homes

Many home buyers can get a great deal by buying a foreclosed home from the U.S. Department of Housing and Urban Development (HUD). HUD takes back homes that have been foreclosed on from the FHA mortgage loan program. If you are looking to buy your first home and you are interested in buying a HUD home, understanding the process can get you a great deal.

Foreclosure Listings: Where do you find HUD Foreclosure Homes for Sale?

Most HUD homes are listed for sale and are not sold at auction as in the past. All HUD homes for sale are listed by contractors to HUD that maintain listings for each state.

Who Can Buy a HUD Home and Foreclosure HUD Homes Sales?

While anyone can buy a HUD home - even investors - there is a procedure that gives first preference to owner-occupied borrowers using the property as their primary residence. When a HUD foreclosure home is first listed for sale, there is a priority period where only owner-occupant purchasers can submit bids. Once that period is over, towns and non-profit organizations are usually given an opportunity to bid on these homes. Following that period, any buyer including investors can submit bids.

How Do I Buy a HUD Home?

The simplest way to buy a HUD home is to find a Realtor who is approved to work with HUD and have your Realtor assist you through the process. Your Realtor is familiar with bidding deadlines, eligibility criteria and what types of offer prices may be accepted.

Once you find a home from the list on the web site above, work with your Realtor to submit an offer on the property. If the property is still in the owner-occupant restriction period, then you will see on the web site a bid deadline. HUD will accept all bids until that deadline and is required to accept the highest offer received during the bid period.

Once a property has passed through the owner-occupant period without a bid and is available to all buyers, the bidding deadline will be changed from a date to "Daily." This means that offers are accepted and reviewed daily and you do not have to wait around for an answer

Special Deals through the Good Neighbor Next Door Program

Great news for home buyers who are law enforcement officers, firefighters, emergency medical technicians and teachers of Kindergarten through 12th grade: The Good Neighbor Next Door program will allow you to purchase HUD home at a discount of 50% off the listed price of the property. That is correct - a 50% discount. The only catch is that you have to live in the property for at least three years. HUD enforces this provision by having you sign a second mortgage note for the discount amount that is forgiven after three years.

Getting Pre-Approved to Purchase HUD Foreclosure Homes

Getting pre-approved for a mortgage to purchase a HUD home is extremely important to make sure you do not lose your accepted bid. If you win a bid on a property during the owner-occupant time period, you need to make sure that your mortgage approval is solid and comes through because if you do not get approved for your loan you will most likely not have time to re-apply to a new lender. HUD will simply sell the property to the next-highest bidder.

There are many HUD homes available for sale right now and new homes are coming on the market each week. Check the web site often or work with your Realtor to take advantage of these great deals for home buyers.

For a free mortgage pre-approval that will qualify you to purchase a HUD foreclosure home, please email us or call us at 1-877-868-2503.

To see the current HUD rates for mortgage, visit our HUD Rates.

If you have any question on Foreclosure HUD Homes Sales that you would like to get answered by our expert mortgage brokers, please email us or call us at 1-877-868-2503.

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