The U.S. Department of Housing and Urban Development manages the sale of a stockpile of single-family and multi-unit homes that are government property, mainly because of mortgage defaults by the buyer. The selling prices for these homes might be below or at market rates, depending on their condition and the region of the country. Potential buyers compete to purchase the homes during an open bidding period.
The HUD Home Store website is the main portal for listings of HUD's available homes. This site has a searchable database of homes for sale throughout the nation. Start a simple search by clicking your state on the U.S. map or the state in which you are seeking a property. The database lets you narrow your search to counties, cities, streets or property numbers. Buyers often obtain property numbers from real estate agents or HUD sale signs posted on HUD-owned homes.
HUD recommends you arrange an inspection of the property that interests you before bidding. Generally, these homes have been unoccupied for extended periods, which might result in moderate to extensive disrepair. In some cases, vandals strip vacant HUD properties of plumbing, electrical and other equipment. HUD sells its homes as-is, which requires that you know the true condition of the house.
The agency maintains a list of professional home inspectors on its website and provides tips for getting the best results and information from your inspector. Once you select an inspector, he makes the necessary arrangements with HUD to gain access to the home. If your schedule permits, go see the property during the inspection.
HUD does not provide financing for the homes it sells. You must arrange mortgage financing through your bank or credit union for the purchase price of the home you plan to buy. When you pre-qualify through your financial institution, your mortgage specialist will decide the amount of your down payment on the loan that you arrange.
The Federal Housing Administration has a rehabilitation loan program for homes that need extensive repair, code upgrades or modernization. Among the restrictions, the most important is that you pre-qualify for mortgage financing to buy the home. The property can't have more than four living units when you use this funding for your HUD fixer-upper.
HUD's Home Store website displays the bidding dates for each property in its inventory. After you find a home that interests you, contact a licensed real estate broker to submit your bid. Much like making an offer on any other home for sale, the regulations for the transfer of real property from seller to buyer is a legal transaction that must comply with laws in your state. HUD publishes the successful bids on each state's portal page on the Home Store site. Your broker will also let you know if your bid was successful.
Carol Luther has more than 25 years of business, technology, and freelance writing experience. She has held leadership roles in higher education management, international development, adult education, vocational education, and small business support programs