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How To Buy A HUD

A HUD home is a residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Once a HUD home is available for sale, it can be found at www.hudhomestore.com under one of the following listing periods:

  1. Lottery: During this period, the property is only available for government agencies and nonprofit organizations to place a bid. Click here for more information regarding these purchases.
  2. Exclusive: During this period, the property is available for owner-occupant bidders, as well as government agencies and nonprofit organizations.
  3. Extended: During this period, the property is available for all bidders, including investors.

All bids must be submitted by a HUD registered real estate broker. Please contact us if you are interested in placing a bid on a HUD property.

Information needed to place a bid:

  • A copy of your driver's license to confirm your identity
  • Your current address
  • Your phone number
  • Your social security number
  • Offer amount
  • Type of financing, i.e. Conventional, FHA, VA, Cash, etc.
  • Amount, if any, you would like HUD to pay toward your closing costs (up to 3% of the purchase price)
  • Email address to use Docusign for e-signatures
  • Name of Title Company you want to use for closing

What you will need if your bid is accepted:

Once your bid is accepted, your contract package has to be received by HUD's Asset Manager, Raine, within 2 business days. HUD uses Docusign to accept digital signatures in an effort to maximize efficiency throughout the HUD buying process. You will receive an email with instructions on how to sign digitally via Docusign. The following items must be submitted with the package:

  1. A pre-approval letter from your lender, or a proof of funds letter if you are paying cash. Your pre-approval letter must include the following information:
  • Must be on bank letterhead
  • Date (within the last 30 days)
  • Name of the borrower / buyer
  • The letter must say "credit has been reviewed" (financed purchases only)
  • Specify the type of loan, i.e. FHA, VA, Conventional (financed purchases only)
  • The amount for which you are pre-approved (financed purchases only)
  • The letter must state you have the funds to close (cash purchases only)
  • Must be signed by a representative of the lender

Earnest money: In certified funds payable to HUD. $500 earnest money is required for all properties with a purchase price of $50,000 or less. $1000 earnest money is required for properties with a purchase price of $50,001 or more.

After your package is submitted, it will be reviewed and signed by Raine. This is when the offer is officially accepted. At this point, you will have 15 days to complete a home inspection. There may be a re-winterization fee if you choose to have an inspection (actual fee varies). All utility activation and inspection charges will be at your expense.

Empire Real Estate is a HUD listing broker; therefore, very knowledgeable about HUD properties. Please contact us for additional information or questions regarding the HUD bidding process. We offer free training sessions to buyers and real estate professionals.