What Is a HUD Home?

When you are looking into purchasing a home of your own, it only stands to reason that you will want to look into your options – all of your options. While there is often a great deal of talk about the foreclosure crisis and the opportunity for buyers to get a deal and it is common for buyers to turn to a real estate agent to take a closer look at homes that have been listed more conventionally; what people don't always hear about – or know enough about – are HUD homes.

For those who are not familiar with a HUD home, the basic definition is simple: a HUD home is a residential property that the Department of Housing and Urban Development took over after a foreclosure on a property which had been purchased with an FHA insured mortgage. In each case, a HUD home will be a single family property, a duplex or a residential property with three or four units that can be leased out to others. More or less, a HUD home is sold so that the government can recover the money that the lost on the investment.

For those who want to buy a property that is likely to be more affordable than some others that are on the market, a HUD home is a great option. While the process of buying a HUD home is a bit different, most individuals who have been saving for a home and who are pre-approved for a mortgage will find that they are able to purchase these properties – provided they intend to live in them.

A priority period is reserved in which those that are interested in purchasing a HUD home to learn about the property, to choose a HUD-approved real estate agent to work with and to place an offer on the property. After the priority purchase period comes to an end, each offer will be reviewed and the next step will be to accept one offer above the rest; the real estate agent who is working with the winning bidder will be contacted and a settlement date will be set.

In addition, there are some home buyers who will find that they are able to save even more when they buy a HUD home. For example, qualified hurricane evacuees can qualify for a greater discount. Likewise, police officers, emergency responders, firefighters, teachers and others who work in the public service profession will find that there are programs that will enable them to save more by purchasing a HUD home.

The process of buying a HUD home isn't going to be right for everyone. Some people are better suited to purchasing a home through a closed auction than others; some people want certainty when they make an offer on a home and want to have more control over scheduling the closing. If you think that buying a HUD home is something that you'd learned more about, make an effort to contact a HUD-approved real estate agent to get the answers you need.