Foreclosed Homes For sale
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What is a "HUD Home"?

Homes acquired by the U.S. Department of Housing and Urban Development are "HUD homes". They include single family residences, townhouses, condominiums and other types of residential properties.

When a homeowner cannot meet the payments of a HUD insured mortgage, the home gets foreclosed by the mortgage lender. The mortgage lender then transfers ownership of the home to HUD and collects the amount owed to it. HUD will then offer the home for sale at market value with the intent to sell as quickly as possible.

HUD homes attract a wide range of potential buyers, including investors, teachers, police officers and home buyers. Investors are generally bargain hunters looking for a property that can be bought, fixed up and resold at a higher price. Teachers and police officers can purchase HUD homes at 50% of the listed price. Other home buyers are motivated in homes for sale at below market value, which allows them to acquire a larger home than they could normally afford to purchase.

Who Can Buy a "HUD Home"?

Anyone can buy a HUD home, if pre-approved for a mortgage or have a verifiable amount of cash for the purchase. Most HUD homes are affordable to low and moderate income Americans.

An owner-occupant, who intends to buy a HUD home as his or her primary residence, usually has priority over other buyers. However, this priority expires after a period of time and the real estate becomes available to other qualified buyers.

Employees and relatives of U.S. Department of Housing and Urban Development employees are eligible to buy a HUD home. To qualify for a HUD-owned single family home, they must receive written approval from the Director of HUD's Office of Single Family Asset Management. Paragraph 10-29C of Handbook 4310.5, REV-2, Property Disposition Handbook-One to Four Family Properties, details the exact requirements to purchase a HUD-owned single family property.

How to Buy a "HUD Home"?

HUD homes are for sale at market value and can only be bought through a real estate agent approved by the U.S. Department of Housing and Urban Development. Approved agents can submit bids any day of the week, including weekends and holidays. All submitted bids are reviewed within a short delay and generally, the highest net bid is accepted. If there is no acceptable bid, the home becomes open to new bidding until sold.

If a bid is accepted, your real estate agent is notified usually within 48 hours. Settlement is usually within 30-60 days, during which time financing is arranged and the sale is closed. If you do not close by the settlement date, your earnest money deposit is forfeited or you have to pay for an extension of your sales contract.

Since HUD homes are sold on an “as-is” basis, a professional home inspection before submitting a bid is recommended. HUD will not pay for any needed repairs or corrections for any defects found. Keep in mind that repairs, replacement and/or renovations can add substantially to the cost of a purchased home.

The selling agent's commission is paid by HUD, but only if you make this a condition of your offer.

How to secure a loan to purchase a "HUD Home"?

The U.S. Department of Housing and Urban Development does not provide home loans directly. However, HUD has several mortgage insurance programs, including:

- HUD's FHA Loans
- HUD-Insured Loans for Rehabs
- HUD-Insured Loans for Special Credit Risks
- HUD-Insured Energy Efficient Loans
- HUD-Insured Loans for Condominiums
- HUD-Insured Loans for Disaster Victims
- HUD-Insured Reverse Mortgages for Elderly Homeowners

You can contact a HUD approved lender, who will walk you through the loan process and secure the necessary loan for you.

Click here to find a HUD foreclosed home.