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Frequently Asked Questions

Q: What's a HUD home

A: HUD homes can be a very good deal. When someone with mortgage insured by HUD cannot meet their payments, the lender forecloses on the home. HUD then pays the lender what is owed and takes ownership of the property. Then, HUD sells the home at market value as soon as possible.

Q: Who can buy a HUD home?

Anyone can buy a HUD home. These homes are not only for low-income buyers. However, most are in affordable price ranges for low- to mid- income purchasers. If you have the cash available or can qualify for a mortgage, you can buy a HUD home.

Q: How can I buy a HUD-owned property?

A: The best way is to call a real estate broker or agent in the area where you want to buy a HUD home. In most cases, HUD homes are sold in an offer period.  At the end of that period, all offers are opened and the highest bid is accepted. If the home is not sold in the initial offer period, you can submit a bid on any business day.

Q: If my bid is accepted, then what happens?

A: Your real estate agent should help you through the paperwork. You will be given a settlement date, normally within 30-60 days, where the transaction will be finalized.

Q: Does HUD make repairs to these homes prior to sale?
A: HUD homes are sold "as-is," without any warranty. That means HUD will not usually make repairs except in cases to eliminate a major safety or health problem. Some of these homes may not be in good condition. However, all known defects in the condition of the house are reflected in the purchase price. The home should be professionally inspected after you bid on it.

Q: Does HUD pay any costs toward my purchase?

It depends. In some states, HUD will pay up to a certain percentage (around 2%) of your closing costs.

Q: Are HUD homes meant for buyers with low incomes?

A: HUD homes range in price, but many are affordable for low- and mid-income buyers.

Q: Can HUD homes be purchased as an investment?
Most HUD homes are offered on a priority basis to owner-occupant purchasers. That is, people who are buying the home as their primary residence. Following that priority period, properties that are still unsold are available to all buyers, including those buying for investment purposes.

Q: Where can I get a loan to buy a HUD home?

HUD does not make loans directly. But there are a number of mortgage lenders that can help you buy a home.  Visit our mortgage information page for listings. We also provide a mortgage calculator for figuring out your monthly payment.

Q: I've heard there's a program for teachers? For firefighters and EMTs?

That's right, HUD does have a program for educators and some public service employees. It's called "Good Neighbor Next Door", and it allows qualified individuals to purchase a HUD home for half of the listing price. There are FHA mortgages in place for the TND program that require only a $100.00 downpayment.  More information on Good Neighbor Next Door.

Q: What is a VA home?
A: Much like HUD homes, property that is financed using a VA guaranteed loan and is foreclosed on due to non payment of the loan is reposessed by the VA and sold at market value.

Q: Do I have to be a veteran to purchase a VA-owned property?
A: No. All VA properties are available for sale to both veterans and non-veterans alike.

Q: How can I buy a VA-owned property?
A: The best way is to contact a real estate broker or agent in the area where you wish to purchase the home. Brokers have the responsibility of showing VA properties to prospective buyers and preparing purchase offers for the properties.

Q: Will the VA finance a purchase of the property?
Yes, financing is available for most, but not all, property sales. With VA financing, the down payment requirements are usually very reasonable, and the interest rate is established by VA based on the current market conditions. However, any purchaser who requests VA financing to purchase a VA-owned property must have acceptable credit and income to meet the loan payments, maintain the property, and pay all taxes, insurance, utilities and other obligations. The purchaser also must have enough funds remaining for family support. Often, due to VA stipulations, it is better to use outside financing. 

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