What Homebuyers Should Know About HUD Homes

by Carolyn Kay 12/18/2022

If you're searching for a new home, you may have come across references to Housing and Urban Development (HUD) homes. HUD offers government mortgage insurance programs and loans. But what is a HUD home, exactly?

Here are the basics to help you with your home search:

HUD Homes: The Basics

HUD homes are foreclosed properties reclaimed by the government. When a buyer uses a Federal Housing Administration (FHA) loan to buy a residential property, they risk losing the property entirely if they cannot make their mortgage payments. The government then re-sells the homes at a low price to make up for the money spent paying off the rest of the mortgage.

Every HUD house gets an appraisal to determine the best price, but they are still often below market value. This makes them attractive options for first-time homebuyers, flippers or anybody looking for a good deal.

Incentives to Buy HUD Homes

The HUD agency offers many incentives to homebuyers to encourage the sale of these foreclosed properties. These incentives include grants, vouchers and special buyer programs to assist with mortgage payments, down payments and more. Buyers with careers in public service or who work with nonprofit organizations are also eligible for some of these special incentives.

Buying a HUD Home

It's important to note that the process for buying a HUD home differs from other homes. You won't find listings for these properties in the usual places like MLS or search portal sites. Instead, you can search and browse HUD listings on their website.

HUD homes are different from other properties in that you have to buy them at auction. You need a licensed real estate agent to represent you, to bid on and purchase a property.

Is a HUD property right for you? There are many factors to consider, but knowing the basics will help you make your decision. Consult a real estate professional for advice on the best way to proceed with your home search.

Housing Programs

Property Types

About the Author

Carolyn Kay

As a Real Estate professional, I specialize in helping my clients buy, rent or sell properties in Westchester County. I am passionate, dedicated and committed to my clients and my first priority is to provide them with first class service and guidance throughout the entire process. It has been said that I go above and beyond for my clients to get the deal closed! I have experience working with clients who have financed their purchases with either a conventional, VA or FHA loan and have a good understanding of how they work; no sale is too big or too small for me to take on. My family and I relocated to England for 2 ½ years, this was a wonderful experience but at the same time, it was overwhelming. I have first hand knowledge of the challenges as well as the positives in discovering a new community. I was born and raised in Scarsdale and once married, my husband and I decided to raise our two daughters here. Both of our daughters successfully graduated from the Scarsdale schools and are both married, living and working in Manhattan. After living in the same house for 30 years my husband and I took the leap, sold our home and bought and renovated a condo townhouse in another town. Once again we are discovering a new community and fully understand the highs and lows of selling a home we loved and buying and making a new home. I feel that my personal real estate experiences have made me more in tune with my client’s needs and therefore better able to help them navigate through the complex process. Please call me so that I can put my knowledge and experience to work for you.