A HUD home is a residential property owned by HUD due to a foreclosure of a FHA-insured mortgage. Almost anyone can purchase a HUD home. They are initially offered to purchasers who are buying the home as their primary residence. If properties remain unsold for a period of time called the (priority period) it becomes available to all buyers which include investors.
HUD homes can be very good opportunities for first-time home buyers and investors as they are sold below market rates in most cases. It allows a first-time home buyer to purchase a home at a reduced rate and usually receive repair credits to make necessary repairs to the home. Investors benefit by being able to purchase homes for rental or re-sale purposes. This is a complex process to the general public and HUD requires that all purchases be made through a registered real estate professional.
You must follow all of the steps any home buyer would follow in addition to the HUD electronic bidding process (which is handled by your real estate professional). You must be pre-approved for a loan, be informed of your rights, become familiar with loan programs, search for a home, place a bit and get a home inspection.
Once a home is selected, you will work out the details of your offer with your real estate professional. The offer will be submitted electronically and your realtor will be notified if your offer is accepted. You will be given adequate time to have all inspections performed, but all HUD homes are sold AS IS.
You may visit homes for sale on this web site: www.hud.gov/homes/index.cfm
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