What is a HUD Home?

HUD Homes 101

• Related Articles:
  • What is a HUD Home?
  • Guide to Buying a HUD Home
  • The FHA and VA loan process
  • Benefits of Buying a HUD home
  • Why an FHA loan?
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The U.S. Department of Housing and Urban Development (HUD) was established in 1968 to manage federal housing and community development programs.  This department encompassed a number of other housing agencies and took on their responsibilities including the Federal Housing Administration (FHA). The agency has commonly been known as HUD / FHA since 1971.

HUD/FHA programs exist to insure real estate lenders against loss in the event of a foreclosure. Aspiring homeowners can apply for a loan through an approved HUD lender. If the application is accepted, the loan is granted and the borrower purchases one of the many HUD homes for sale. The lender’s loan is then insured by HUD / FHA. In the event that the home is foreclosed, HUD covers the lender’s loan as well as other expenses incurred during foreclosure. The HUD foreclosures are then owned by the government and can be dealt with it in any manner it sees fit. HUD houses are often the perfect solution for low income housing needs. Government homes and government housing can often allow families to become proud homeowners.

When HUD / FHA reclaims a property, the Property Disposition Department is the first to handle it, securing it from vandalism, damage, or trespassing. At this point, it is decided whether HUD will sell the property itself or through a real estate broker. In the event that a broker is used, certain steps must be followed. The broker must complete the home repairs set forth by HUD and manage all aspects of advertising, bidding, and escrow accounts for the foreclosed property. Real estate agents involved in the sale of HUD houses receive a 6% sales commission regardless of how the home is sold. In order to buy a HUD home, a licensed and approved HUD broker or other authorized agent must be contacted.

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Other Articles on HUD Homes & Other Government Properties

What is a HUD Home?

HUD houses are often the perfect solution for low income housing needs... read more

Guide to Buying a HUD Home

At far lower prices than average real estate, HUD homes can be real values for first time home buyers, investors, and more... read more

The FHA and VA loan process

Both FHA and VA loans are ways in which the government helps people to secure affordable housing while helping the lenders maintain secure home loans read more

Benefits of Buying a HUD home

Aside from the obvious benefits to the lender, HUD homes present a number of opportunities and advantages to the potential homebuyer. read more

Why an FHA loan?

There are a number of home buyers who don't understand the benefits associated with asking their lender for an FHA loan... read more