With the glut of foreclosures on the local market narrowing down your options may seem daunting. A HUD home is a house purchased with an FHA mortgage which later entered default and foreclosure. Except for the first 30 days, that is: legally, HUD cannot accept bids on homes from real estate investors within the first 30 days that a home has hit the market.
In other parts of the country, I have seen investors buy HUD homes for 80 percent of the list price in the first month. HUD requires $ 1000 deposit for offers over 50,000 U.S. dollars, but never more than $ 2,000 deposit. Banks are the same, they’re not going to let their homes go for 5 – 10 cents on the dollar, when they can sell them for 70 – 80 cents on the dollar.
My strong advice is to find a realtor that has a lot of experience buying HUD Homes. To learn more on how you can buy homes for sale by the US federal government, you go to You will find a lot of information, guide and tips on how you can submit a bid. In addition, the government will auction off the homes online or in various locations offsite.
Earnest money is also required by Hud when buying a hudhome, even for investors. The homes are posted each day and you will find a nationwide list of properties. The Brokers working with HUD properties must go through an annual renewal process and they are (should be) familiar with the HUD bidding process, which is much different than that of general sales and working with other agents.
If an FHA loan goes bad” or is foreclosed, HUD then buys out the underlying lender, and puts the home on the market to resell. To sum it up, if you can buy it with an FHA mortgage … then it could be a HUD Home in the future. But just because an agent is registered with HUD doesn’t mean he or she is going to be the best agent to represent you in the purchase of a HUD home.