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What is a HUD home? A HUD home is a property acquired by HUD (The U.S. Department of Housing and Urban Development) as a result of a foreclosure on a home where the loan originated was an FHA loan (Federal Housing Administration). These homes are priced at or below market value in an effort to sell them quickly. They also offer low down payment options of $100 down on HUD homes financed with FHA loan programs and will typically contribute up to 3% towards a buyers closing costs, prepaids, and/or points which can be very helpful.
HUD protects their assets by performing a property condition report on all homes and providing a copy of this report online. This will tell you if there are any issues with the home that need to be addressed but should NOT take the place of a home inspection. All HUD homes are sold in as-is condition.
In order to purchase a HUD home, you must submit an offer through an online bidding process. Due to the stringent guidelines and time constraints, it is highly recommended that you use a licensed Realtor who is also a HUD registered agent and is familiar with the HUD process and how it works.
HUD homes can offer buyers the unique opportunity to purchase a great home with little to no money down.