What Is a HUD Acquired Home?

HUD acquires homes lost to foreclosure.

The U.S. Department of Housing and Urban Development sells residential properties that have been acquired "as a result of a foreclosure action on an Federal Housing Authority-insured mortgage." HUD does not offer direct financing to purchase residential properties but any qualifying buyer may obtain financing and purchase a HUD acquired home.

Function

HUD homes are typically one to four family residential units that have gone through foreclosure. The purpose of HUDs interest in the FHA foreclosed property is to sell the home and recover any losses sustained during the foreclosure process.

HUD Home-buying Process

HUD sells their homes through a bidding process. Individuals interested in purchasing a HUD home must place a bid through a real estate agent/broker that is registered with HUD. Because the homes were acquired as a result of a foreclosure, HUD sells the homes on an "as-is" basis and strongly recommends that the potential homebuyer have an inspection before making an offer.

Purchase Requirements

HUD does not restrict the sale of its properties to certain individuals. Anyone that meets lender requirements for a new mortgage may purchase a HUD home. Special programs also exist to provide certain individuals such as members of law enforcement or teachers a break or discount off the cost of the home.

References

• The U.S. Department of Housing and Urban Development: Buying HUD Homes