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HUD Buying Process


HUD Buying Made Simple - How do I buy a HUD Home and what are the qualifications? 

Purchasing and qualifying for a home that is a government repossession is about the same as buying a “Fair Market” home. Fair market home is a sale that is not a bank owned short sale or anything other than the way it used to be.  Current List of HUD homes for sale

First of all what is a HUD Home.  HUD stand for Housing and Urban Development, this is the government backed home loan backer.  When buyers get an FHA loan it is backed by HUD.

When a HUD home comes out on the market they are given to several different Broker agencies.  These are real estate companies that have relationships with the agency. They go through a process to bring them on the market and they are then listed. There are several ways the homes are listed:

·   As an Owner Occupied only (buyers that are going to live in the home)

·   Good Neighbor (only buyers that are certain employment types such as Fire, Police or teachers)

·    Municipality owners (cities or non-profits can buy to renovate for resale or rental programs for sometimes low income.

·   Finally if the homes are not sold within the first month or so they are opened up to investors

HUDs goal is to make the homes available for owner occupation.  They are not like short sales or bank owned homes that most of the time sells below market value.  They are in fact listed and sold usually at market value taking into consideration the condition of the home.

HUD homes have none of the utilities active.  This makes some extra time and effort to work though.

Working with HUD offers are the same process as a normal purchase at first.  The difference in the process is the way that the offers are written and submitted.

HUD homes come on the market at different levels as I stated in the first part on this blog.  The homes are brought on with a 10 ten day viewing time to give the buyers time to review the homes and determine if it is the right property for them. It is then a silent bid process submitted online. 

The Earnest Money amount of any HUD home is $1000.00 (one thousand dollars) to @2000.00 Depending on the price of the home.

Using a Realtor that has written HUD bids is defiantly an advantage.  Knowing what to write and how to write it is a must or the buyer faces rejection from the start.  Enlisting the help of an experienced Realtor is a “need to” factor at least the first one.  Have your Realtor contact one of the HUD listing agents for their advice.

Now if your offer is accepted, you must have all of your paperwork ready to mail to the HUD BLB (the HUD contractors that do the work) within 24 hours. 

The final part of buying a HUD is what to do after you have been chosen and your bid won the process.  Usually HUD has at least a 45 day close period so you can get everything done that needs to be done.

The work begins with getting the inspection completed.  HUD just as any other bank owned or short sale will not pay for any fixes.  The inspection is for your information only to determine if you want to go through with the sale.  It is up to the buyer go get all of the utilities turned on in order to get the complete picture.  The buyer pays for everything including the turning on and turning off.

Once the inspection is done, and you are going to continue with the sale, you must follow all the regular processes for a real estate sale.  Make sure you keep up with any questions that the BLB asks of your clients.

Buying a HUD is not hard, but it is a lot of work.  Knowing what your bid price should be is something that you and your Realtor need to determine if there is any bid up amount. Download the HUD buyer guide Download Hud buyers guide.PDF.

Contact us with questions or assistance to purchase a HUD owned home or negotiate the contracts.


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silvercreek realty

Silvercreek Realty Group
1099 Wells St Meridian, ID 83642
PH: 208.631.2754 | FAX: 208.401.1114

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