What is a HUD home?
HUD, an acronym for the United States Department of
Housing and Urban Development, is the Federal agency that oversees the
resale of “HUD homes”. HUD homes refer to foreclosed properties that
were conveyed to HUD when a homeowner failed to make payments on their
FHA (Federal Housing Administration, a sub-agency of HUD) insured
mortgage. As a result, the government sells these homes at auction in
order to regain the financial loss due to the foreclosure.
A HUD home will generally fall into several types
of residential real estate—single family residence, townhome,
condominium and mobile home. The age and condition of a typical HUD home
will vary from property to property. Due to this diversity among the
current inventory of HUD homes, the government sells these homes
“As-Is”. In other words, HUD does not warrant the condition of the
properties. Though the typical home buyer may shy away from this lack of
warranty, he or she should realize that these properties open up the
opportunity to buy the home at an affordable price while maximizing the
purchase potential in the home.
The process of buying a HUD home differs from other
residential real estate. In general, it is important to know who is
eligible to purchase a HUD home, how to find and view these properties,
and how to bid and close on a HUD home.
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