A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

The following information is provided to as an introduction to the process through which HUD homes can be purchased. Scroll down the page and click on any item in red to access more information. This service is provided at absolutely no cost to you.

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

If you are an evacuee displaced by Hurricane Katrina, Rita or Wilma, you may be eligible to purchase a HUD Home at a discounted price.

HUD does not warrant the condition of its properties and will not pay for the correction of defects or repairs. Since the new owner will be responsible for making needed repairs, HUD strongly urges every potential homebuyer to get a professional inspection prior to submitting an offer to purchase.

HUD does not provide direct financing to buyers of HUD Homes. Buyers must obtain financing through either their own cash reserves or a mortgage lender. If you have the necessary available cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. While HUD does not provide direct financing for the purchase of a HUD Home, it may be possible for you to qualify for an FHA-insured mortgage to finance the purchase.

FHA REO properties located in designated Revitalization Areas are available at a reduced sales price to law enforcement officers, teachers, firefighters, emergency medical technicians, nonprofits and local governments. Read more about these Good Neighbor Initiatives.

When a HUD Home becomes available for sale, usually it is listed on the Multiple Listing Service and on HUD Home Store. Any real estate broker who is properly registered with HUD may submit contracts for purchase. Brokers are used because of their expertise in the local residential real estate market and because HUD does not have sufficient staff either to show properties to prospective buyers or to assist in those other aspects of homebuying normally handled by brokers.

Before FHA properties are publically listed for sale, they are first evaluated to ascertain if they qualify for direct, exclusive sale to units of local government and FHA-approved nonprofit organizations. Generally, these properties are located in a designated Revitalization Area.

FHA REO properties that are not sold under any special programs are listed on HUD Home Store and offered on an exclusive, priority basis to owner occupant purchasers (people who are buying the home as their primary residence). Following the Exclusive Sales Period, unsold properties are then made available for purchase to all interested buyers, including investors, under the Extended Sales Period.

• Bulk Sales: Properties that have been listed for at least sixty (60) days are available simultaneously to both local governments and the general public. Local governments purchasing 10 or more properties are eligible to receive a discounted purchase price. Properties with an appraised value of $20,000 or less that are purchased under the Bulk Sales Program may be purchased for $100. All other properties are sold at a minimum discount of 10 percent off of the appraised value of the property.

• $1 Homes: HUD properties that have been offered for sale for one-hundred-and-eighty (180) days and that are not under a sales contract will be offered for purchase to local government agencies for a sales price of $1, along with applicable closing costs.

In order to qualify to sell HUD Homes, you first have to complete and sign the following forms and any supporting documentation, and submit these to HUD: SAMS 1111 Broker application and the SAMS 1111A Selling Broker Certification.

Once this has been accomplished, and you have received a HUD-issued name and address identification number (NAID) you can show, advertise, and submit offers on HUD Homes. Upon closing of a sale, HUD pays the broker a commission of up to five (5) percent of the selling price if this was a condition of the offer. Click here for additional information.

HUD Homes are sold in their "as-is" condition. HUD does not warrant the condition of its properties and will not pay for the correction of defects or repairs. Since the new owner will be responsible for making needed repairs, HUD strongly urges every potential homebuyer to get a professional inspection prior to submitting an offer to purchase. Because of HUD's as-is policy, HUD Homes can often be a great opportunity for those homebuyers in search of a "fixer-upper". Not every HUD Home needs fixing up, but when one does, it can be a real bargain. For example, HUD's asking price on the home reflects the appraised value in its current ("as-is") condition, unless otherwise specified.

While HUD does not provide direct financing for the rehabilitation of REO properties, FHA does provide rehabilitation financing assistance through the 203(k) Rehabilitation Loan Program. Also, keep in mind that on most sales the buyer can request HUD to pay up to 3% of their financing and closing costs.

A NAID number is a Name Address Identification Number issued by HUD. This number allows the agents and brokers to submit bids on behalf of prospective buyers of HUD homes.