The Department of Housing and Urban Development (HUD) is a great resource to use when you are in the market for a new home.
HUD homes are oftentimes more affordable options than houses for sale on the traditional real estate market and they can be financed through a variety of methods. Because these homes are usually available at a more affordable price, they are an ideal option if you are a first-time homeowner or simply want to save money on your next place.
HUD houses for sale can be found all throughout the country, allowing you to find a home in just about any location through the program. On the HUD home store, it is easy to find a variety of properties that suit your needs. Learn more about the process of finding HUD houses for sale in the sections below.
What are HUD homes?
You may be wondering “What is a HUD home and how does it differ from any other type of house?” HUD homes are properties that were once financed with a Federal Housing Administration (FHA) loan and went into foreclosure because the owners were unable to maintain their payments. When an FHA-insured home becomes foreclosed, HUD assumes ownership of the property due to the fact that the FHA is a part of the program.
Once HUD takes ownership of a foreclosed home, it recoups its financial loss by offering the home for sale on its own real estate marketplace. These properties include everything from single-family homes to four-unit residences.
HUD does not acquire homes to sell through other methods. For example, you cannot sell your house directly to HUD if you are interested in moving out of your current place, even if you have an FHA mortgage on the home. The only properties on HUD’s marketplace are FHA-insured homes that went into foreclosure.
When asking “What is HUD housing?” keep in mind that HUD has a variety of housing programs. The Housing Choice Voucher program, also known as Section 8, is just one of them. This type of HUD housing is a form of assistance for low-income households who need help paying rent. Through this program, households receive vouchers that allow them to live in properties that have affordable rents. This form of HUD housing assistance is separate from the houses you can find for sale from HUD.
Remember, HUD homes for rent are available through the Housing Choice Voucher program. If you are a renter looking for affordable housing, note that HUD houses for rent cannot be accessed on the home store.
Where to Find Free Listings of HUD Homes for Sale
HUD homes are a great option for any household that wants to buy a first home or get great financing on their next home purchase. To access this HUD housing opportunity, interested homebuyers must use HUD’s real estate marketplace known as the HUD home store. By accessing this free listing of HUD homes for sale, buyers can browse through hundreds of properties and keep an eye on houses that may be listed in the future.
The easiest way to find HUD houses for sale in your area is to enter your state as well as your preferred county, Zip code or city. If you have a very narrow search in mind, you can even find a home by looking for available properties on a particular street.
After narrowing down where you want to look for homes, you can also enter a price range that you are comfortable with. Many homes are sold for a very affordable price that is well below the market value compared to other homes in the area, making this a budget-friendly option for finding a place. Finally, it is possible to find HUD homes for sale with your desired number of bedrooms and bathrooms.
Once you have entered all of your search parameters, you can browse through a list of available properties that may interest you. Keep in mind that the number and variety of houses available will depend on where you are looking. Some areas of the country have a wider variety of homes to choose from, while others may have fewer options. Even if you are not able to find a home that you want right now, you may be able to find one later. The store is regularly updated as soon as new listings are added.
If you are interested in HUD homes for rent instead, you may start by contacting the Public Housing Authority (PHA) in your community. At the same time, if you already own a HUD housing unit, you may choose to rent the home out through the Housing Choice Voucher program. This is an option if you no longer want to live in the property but are interested in becoming a landlord who accepts Section 8 vouchers. To work with the Section 8 program, you may contact the PHA in your area to get started.
Helpful Resources for Finding a HUD Home
Although HUD has their own resources and homes list, you can find affordable housing in other places. Certain websites also provide listings for Section 8 homes. View the resources below if you are interested in finding a low-cost rental home.
How to Score a Good Deal on HUD Foreclosed Homes
Once you have found HUD homes that you are interested in buying, it is helpful to understand how the process works. HUD housing sales are a little different than buying a house through the traditional real estate market.
The most important difference to understand is that HUD houses for sale are initially only available to owner-occupants, nonprofits and government agencies that are interested in buying a property. After this initial period, homes may be purchased by any bidder, which may include investors who simply want to buy a house in order to make repairs before renting out or reselling the home.
Before you can place a bid on HUD homes for sale, you will need to register and obtain a bidding number. The HUD home store has a registration portal for members of the public as well as realtors, who can bid on behalf of a buyer.
When looking at the free listings of HUD homes for sale, you will also notice that each property indicates whether it is eligible for any special financing. Most of these properties are eligible for FHA financing if you wish to obtain a home loan through this method.
Furthermore, you will find that many properties are also eligible for 203(k) rehabilitation loans, another program offered through the FHA. With this type of loan, you can help finance the cost of making any necessary repairs to your home.
If an FHA loan is not right for you, it is also possible to obtain HUD homes by working with a traditional mortgage lender. If you plan on working with a private lender, be sure that you tell them you are interested in buying a HUD home before you start the process.