If you're searching for a new home, you may have come across references to Housing and Urban Development (HUD) homes. HUD offers government mortgage insurance programs and loans. But what is a HUD home, exactly?
Here are the basics to help you with your home search:
HUD Homes: The Basics
HUD homes are foreclosed properties reclaimed by the government. When a buyer uses a Federal Housing Administration (FHA) loan to buy a residential property, they risk losing the property entirely if they cannot make their mortgage payments. The government then re-sells the homes at a low price to make up for the money spent paying off the rest of the mortgage.
Every HUD house gets an appraisal to determine the best price, but they are still often below market value. This makes them attractive options for first-time homebuyers, flippers or anybody looking for a good deal.
Incentives to Buy HUD Homes
The HUD agency offers many incentives to homebuyers to encourage the sale of these foreclosed properties. These incentives include grants, vouchers and special buyer programs to assist with mortgage payments, down payments and more. Buyers with careers in public service or who work with nonprofit organizations are also eligible for some of these special incentives.
Buying a HUD Home
It's important to note that the process for buying a HUD home differs from other homes. You won't find listings for these properties in the usual places like MLS or search portal sites. Instead, you can search and browse HUD listings on their website.
HUD homes are different from other properties in that you have to buy them at auction. You need a licensed real estate agent to represent you, to bid on and purchase a property.
Is a HUD property right for you? There are many factors to consider, but knowing the basics will help you make your decision. Consult a real estate professional for advice on the best way to proceed with your home search.
About the Author
Kyung Kim
Hi, I'm Kyung Kim. I immigrated from South Korea to the United States in 1968 when I was 7 years old. I have seen my mom struggle with the English language and work hard to raise her four kids by herself. Still to this day, I don't know how she pulled it off, but she bought her first home in 1979 for $70,000 and because of that decision, she was able to live without worrying about her financial future. I want that for everyone, to feel the pride of home ownership and to build their financial wealth using real estate as part of their financial portfolio. I feel so blessed to play a small role in helping others reach this goal.
I live in Beaverton with my husband, Richard. My mom, who lived with us for several years, passed away in our home in February 2022. Her first home purchase in 1979 made it possible for her to live to the very end, without worrying about her finances. As of August 2022 with a little downpayment assistance, our four children own their own homes. Being in real estate, I quickly realized that if they didn't buy now, they may be priced out of the market in the future. Whether that would have been the case, we will never know, but what we do know is that they are all realizing some good, healthy appreciation in their home values.
As passionate as I am about people owning their homes, I'm also passionate about giving back to our community. I support Compassion First, a non-profit organization that provides aftercare for sex trafficked girls in Indonesia. My husband and I also feel called to financially support social injustice organizations.
I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you.
