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What is a HUD
Home?
Before we can
understand what a
HUD Home is, we need to understand a little about how HUD works.
HUD or Housing and Urban Development is a division of the United States
Government. One of HUD’s major initiatives is to make mortgage money
readily available to consumers who might not otherwise be able to
qualify for a conventional mortgage loan through a bank. HUD does this
through their FHA program.
FHA makes mortgage
money available to prospective homeowners by insuring the banks against
loss for riskier loans. FHA or HUD doesn’t actually lend money they
just insure the loan against loss.
If a homeowner with
an FHA mortgage is foreclosed upon by the lender, then HUD reimburses
the lender for their loss and assumes ownership of the property. HUD
then sells the property for the current market value.
The market value of
HUD homes is determined primarily through an open auction process. HUD
will place homes up for auction where registered bidders are able to set
the market price through their bids.
Who can buy a HUD
Home?
Anyone! If you have
the cash or can secure mortgage financing, you can bid on a HUD home.
To maintain the integrity of HUD’s mission (making homes available to
people who might not otherwise be able to afford the American Dream,)
HUD offers these homes for sale to owner-occupied purchasers first. If
no owner-occupied bidders are available, HUD will allow investor bids on
the property.
HUD does not provide
and easy method to discover what properties they have for sale.
Obtaining a list of HUD homes for sale can be an intimidating process.
The information provided by HUD is not very well organized and sorting
through all of it can be an intimidating and time consuming process.
Fortunately, there are 3rd party services that compile the
HUD data and make the information available in a searchable, easy to
read format.
One of the best
services we’ve found to provide detailed HUD homes information is:
 They
Provide a very detailed (and sortable) list of HUD homes available for
purchase. Better yet, they also provide information on bank
foreclosed properties that are not HUD homes. Without a doubt,
this is the best resource we have found for detailed HUD home and
foreclosure home availability. Best of all... they have a
FREE Trial. Give them a try! |
