How to Purchase a HUD Texas Home

HUD buys and sells homes throughout Texas.

The Department of Housing and Urban Development uses the Federal Housing Administration to insure certain mortgages in Texas. HUD ends up buying some of these insured homes when they go into foreclosure. HUD then sells the homes to the public, either to owner-occupants or investors. . Investors must first learn how to find Texas HUD homes. Investors must also learn the rules for buying a Texas HUD home.

Things You'll Need

• Internet access
• Earnest money
• Financial statements
• Loan documents

Instructions

1. Access the "HUD Homes" web page to find the link for Texas HUD homes. HUD provides links on the page to the websites of companies under contract to sell the homes owned by HUD in Texas and other states.

2. Click on the "Texas" link to search for Texas HUD homes for sale. As of 2010, Southwest Alliance of Asset Managers and BidSelect accept bids for Texas HUD homes. Use either the default settings to search for all Texas HUD properties or narrow your search by city, county, price range, size or other features.

3. Open the "Find a Broker/Agent Registered on BidSelect" page. Search under Texas to find a registered agent or broker. Agents or brokers listed in the search results have registered with HUD and BidSelect to bid on behalf of home buyers. You must use one of these brokers or agents to place a bid.

4. Speak with mortgage companies, banks or other lenders about getting a loan for your HUD purchase. Look for listings eligible for FHA insurance to increase your chances of getting a home loan for a HUD house. The lender will give you preliminary approval if you qualify. You need earnest money--$500 to $2,000-- to place a bid. You will also need financial statements showing your ability to pay for the home if you do not get final loan approval.

5. Submit the loan documents and other financial statements to your agent. Have your agent place bids on the properties you wish to purchase.

Tips & Warnings

• HUD sells homes "as is" and with no warranty. You should check the home before placing a bid to see what kinds of repairs are needed.

References

• BidSelect and Southwest Alliance of Asset Managers: Find a Broker/Agent Registered on BidSelect

Resources

• HUD: HUD Homes
• BidSelect and Southwest Alliance of Asset Managers: Search Property Listings (Texas)