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What Is a HUD Home?
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.
A HUD home is a property that the original lender has foreclosed on. The original lender becomes the owner of the property. If the original loan was a FHA loan, this means that HUD insured the property against foreclosure with the lender. HUD pays off the lender and now become the owner of the property which becomes a HUD home.
HUD requires that you to have a real estate agent represent you and that you understand the process involved in attaining a HUD home. HUD homes can only be sold through a registered HUD broker. Purchasing a HUD home is a completely different process than purchasing a regular home, or a REO or a short sale property.
HUD homes are not found through your local MLS searches. Let us help you find a HUD home.
The purchase process is a bidding process. Your agent collects your earnest money deposit (cashier’s check) and you fill out a HUD purchase contract. Your agent will enter the bid into HUD.
There is a 10 day bidding period. At the end of the 10 day period, whoever has the highest net to HUD, gets the property. If there are no bids, or HUD does not make what they want, then the property is opened to daily bidders.
HUD homes are sold AS IS. HUD will not make repairs. You should have a home inspection so that you know what you are getting.