How to Buy an FHA Foreclosure

When an FHA mortgage goes into foreclosure, the U.S. Department of Housing and Urban Development becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Viewing and Financing

A prospective buyer should view available properties in person or on HUD-related Internet listing sites. Buyers must obtain their own financing through their own funds, make arrangements through a mortgage lender or qualify for an FHA mortgage. HUD does not provide financing. Interested buyers should contact an HUD-registered real estate broker, who makes any offers on a buyer's behalf.

Inspection

Interested buyers should also get a professional inspection before making any offers, since HUD does not guarantee the condition of its listed properties and new owners must pay for any repairs.

Offer Period

An interested buyer should make an offer during the "offer period" as set by HUD. When this period ends, HUD may accept the offer that provides it the highest reasonable net return. HUD extends the offer period for any unsold homes, meaning that offers can be submitted any business day and HUD will notify the broker within 48 hours of the offer's acceptance.

References

• U.S. Department of Housing and Urban Development: Foreclosures