Buying A HUD Home With FHA
HUD homes are houses HUD took over after a foreclosure on an FHA-insured loan. If you plan to live in one, you may be able to buy it with a new FHA loan, including homes that need some repairs.
How a HUD home purchase works
Each item below is a HUD rule or a requirement of at least one program we offer.
- A HUD-registered real estate broker submits your bid. HUD must approve any broker who represents buyers on HUD homes.
- Owner-occupant buyers, government agencies and HUD-approved nonprofits get an exclusive bidding period on HUD homes.
- You certify you will live in the home as your main residence for at least 12 months.
- You cannot have bought another HUD home as an owner-occupant within the past 24 months.
- HUD’s sales contract, form HUD-9548, sets the purchase price and any discount and lists the FHA program you are applying under.
- HUD may pay part of your closing costs. The amount is written on the sales contract.
Homes HUD already owns
Owner-occupants bid before investors
Move-in ready as-is
Repairs through 203(k)
Bids go through a HUD broker
HUD may pay closing costs
What Is A HUD Home?
A HUD home is a one- to four-unit home HUD acquired after a foreclosure on an FHA-insured mortgage and now sells to recover its insurance claim.
When an FHA-insured mortgage ends in foreclosure, HUD can end up owning the home. HUD then offers it for sale to recover the mortgage insurance claim it paid. These homes are called HUD homes, HUD-owned homes or HUD REO properties, and they have one to four units. Many can be bought with a new FHA-insured loan, depending on how HUD lists the home.
If a HUD home meets HUD’s minimum property requirements as it stands, a standard FHA loan works with no repairs required. If it needs work, an FHA 203(k) rehab loan can cover the purchase and the repairs together, as long as the sales contract shows the home is eligible for 203(k) financing. We will look at the listing with you before you bid so you know which path fits. See our FHA 203(k) renovation page.
Buying works differently from a regular listing. Bids go through a HUD-registered broker, and owner-occupant buyers can bid during an exclusive listing period. You certify that you will live in the home for at least 12 months and that you have not bought a HUD home as an owner-occupant in the past 24 months. Full-time teachers, law enforcement officers, firefighters and EMTs may qualify for a 50 percent discount on designated HUD homes through Good Neighbor Next Door.
Why choose Saxton for a HUD home
This page is for buyers who plan to live in a HUD home and want to finance it with FHA.
You Can Bid Early
Owner-occupant buyers can bid during an exclusive listing period that investors are not part of.
A 203(k) Can Fund HUD Home Repairs
An FHA 203(k) rehab loan can cover the purchase and repairs when HUD marks the home eligible.
Bid Through A HUD Broker
HUD must approve the broker who submits your bid.
No Condo Approval Needed
At least one FHA program we offer does not require condo project approval on a HUD home.
HUD May Cover Costs
The sales contract shows any closing costs HUD will pay for you.
HUD Pays Broker Fees
The sales contract lists the commissions HUD pays the selling and listing brokers.
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about financing a HUD home.
Often, yes. HUD lists each home as insured, insured with escrow or uninsured, and the home’s condition decides the FHA option: a standard FHA loan when it meets HUD’s standards as it stands, or an FHA 203(k) rehab loan when the sales contract shows the home is eligible for 203(k).
Yes. Bids on HUD homes are submitted by a HUD-registered real estate broker. HUD must approve any broker who represents buyers on HUD homes.
Yes. HUD homes have an exclusive listing period when only owner-occupant buyers, government agencies and HUD-approved nonprofits can bid. For homes marketed as insured or insured with escrow, that period is 15 days. If no bid is accepted in that period, HUD opens the listing to all buyers.
You certify that you will live in the home as your main residence for at least 12 months and that you have not bought another HUD home as an owner-occupant within the past 24 months. Your broker has to go over the penalties for a false certification with you.
An FHA 203(k) rehab loan can finance the purchase and the repairs together when the sales contract shows the home is eligible for 203(k). Send us the listing before you bid and we will tell you which FHA option fits the home.
It can. The HUD sales contract lists any closing costs HUD will pay on your behalf, along with the broker commissions HUD pays. FHA does not treat HUD’s help toward your closing costs as an interested party contribution.
Yes. Through Good Neighbor Next Door, eligible full-time law enforcement officers, teachers, firefighters and EMTs can bid on designated single-unit HUD homes in revitalization areas at 50 percent off the list price. HUD picks the winning bid at random at the end of a lottery period.
Find out what you qualify for
Found a HUD home you like? Send us the listing and we will tell you which FHA option fits it before your broker submits a bid.
Get Pre-Qualified- U.S. Department of Housing and Urban Development, FHA and housing resources
- U.S. Department of Housing and Urban Development, FHA mortgage insurance premiums
Loan amounts, rates, terms, and eligibility are subject to credit approval, asset and income verification, appraisal, and program guidelines. Program availability varies by state. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.