What Are HUD Homes?

What Are HUD Homes

Table of contents

The acronym HUD stands for the Department of Housing and Urban Development, a governmental agency established in 1965 by President Lyndon B. Johnson as a policy and program to combat poverty. The Department was created to ensure that all individuals in urban areas can access quality housing that is affordable and available to all people.

HUD housing is a title that shows up often when looking for a home. If you are looking for an affordable home, it is good to look into all options available, especially if the options will save you money. If you are in a position of needing an affordable home with low-cost options, consider a HUD home as a way to finance an affordable first home to be used as a residence.

Key takeaways

  • HUD homes are properties foreclosed on by the government after the owner defaults on an FHA loan.
  • Anyone who qualifies for a home loan can buy a HUD home, but it must be their primary residence.
  • Benefits of buying a HUD home include reduced pricing, payment assistance, and the opportunity to buy for as little as $100 down.
  • Home loan programs that help with purchasing a HUD home include Hero Home Programs, Section 8 housing vouchers, and the HUD $100 down payment program.
  • VA, conventional, and FHA loans are all options for financing a HUD home.

HUD homes

 

What are HUD homes?

HUD homes are properties that were purchased with FHA loans and have been foreclosed on. A house becomes a HUD property when homeowners cannot keep up with their monthly payments and default on their loans. At that point, the FHA pays the remainder of the mortgage owed to the lender and then seizes and takes control of the property. To make back the cost, the government will then sell the home, usually at a slight discount from the actual market value. HUD homes are sold as-is.

 

Who is eligible to buy HUD homes?

Any person who is eligible to qualify for any type of home loan can purchase a HUD home. If the buyer has sufficient funds available via financing, they can buy one. But, buyers should be aware of the requirements that a HUD home has. HUD homes should be the buyer’s primary residence and buyers can only purchase one every two years. The buyer must also live in their HUD home for at least one year.

 

What are the benefits of buying a HUD home?

Some people will only consider buying a HUD home, and with good reasons. Reduced pricing, payment assistance with closing costs, a $100 down payment option, and buyer residence over investor property are some of the main benefits of buying a HUD home.

 

Where can you apply for a HUD loan?

Financing a HUD home is similar to financing options available to any other homebuyer. All buyers can conventionally secure a loan. Those with special circumstances or experiences are sometimes eligible for unique programs, such as those that qualify for a VA loan. HUD homebuyers can finance using an FHA 203(k) loan, which includes both the loan’s cost and the cost to make necessary repairs to the home to ensure it is safe for use as a primary residence.

 

VA Loans

VA loans are available for qualified veterans, enlisted service members, and spouses. These loans feature a lower debt-to-income ratio and qualify at a lower credit score than traditional loans.

 

Conventional Loans

Conventional loans, such as those garnered from Fannie Mae or Freddie Mac, are options for purchasing a HUD home in a traditional manner. Moderate credit scores are usually required for conventional loans.

 

FHA Loans

Buyers who have low credit scores or limited credit history can use an FHA to purchase a HUD home. An FHA is insured by the Federal Housing Administration (FHA) and requires a lower down payment.

 

Are there home loan programs that can help me buy a hud home?

Buying any type of home, HUD home or not, can be a stressful time. It can also be quite expensive. That’s why there are home loan programs that will help homebuyers with their house purchase.

 

Hero Home Programs

For current or former heroes, including first responders, teachers, healthcare workers, or military service members, the Hero Home Program offers discounts on selling or refinancing a home. The Hero Home Program is a network of real estate agents and mortgage professionals who assists qualified homeowners and sellers. The program’s nonprofit aspect provides grants to local organizations to provide veterans and other qualified persons with financial assistance.

 

Section 8 housing choice vouchers
These housing programs allow low-income families the possibility of homeownership by providing a sustainable subsidy that assists HUD homebuyers in maintaining their monthly payments.

 

HUD $100 down payment
The HUD $100 Down Payment makes homeownership available to buyers who will own and occupy the home. Buyers forego the usual 3.5% down payment and instead require a down payment of only $100. This is a fantastic deal and discount, as a downpayment for homes can reach 20% down.

 

One dollar program
The one-dollar program is a specialized program that allows low-income or mid-income homebuyers to purchase HUD homes with a value of less than $25,000, and that has been on the market for over six months, for only $1 down. This is an incredible deal that almost eliminates the downpayment for greater accessibility for homeowners of all income levels.

 

Contact us now to get started

There has never been a better time to buy a home. Interest rates are low and sellers are eager to view a buyer’s offer. HUD homes are no different. While the HUD home process may take a bit more patience than buying from a private seller, the lowered down payments and home cost make it worthwhile in the end. When you work with a home buying specialist at Hero Home Programs™, the savings can add up even more. Contact us today to determine your eligibility.

Picture of Jacquelyn Sublett
Jacquelyn Sublett

I love teaching and writing on real estate, finance and mortgage topics. I find it fulfilling hearing stories of first time home buyers who we have helped with the home buying process. Writer for the Hero Homebuyer Programs™

Connect with the Author:

Recommended Posts

What Our Buyers Think

Jules S.
Read More
"5 star service is what you will get when you work with him!ᅠ Not only does he know his product like no other, he makes a special point of communicating throughout each transaction and his follow up skills are unparalleled. Perhaps most importantly, he delivers on his promises!ᅠ Give him a try for your mortgage needs.ᅠ You will not be disappointed!"
Jeremy H.
Read More
"An outstanding job handling refinances.  One of those knowledgeable, straight-shooters - which is really appreciated when you're shopping for a home loan. He can answer a million of questions with ease.  Looking back at the responsiveness, he was outstanding and you can do everything he suggested."
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Eshawn W.
Read More
“By far the best lender we’ve worked with. Got us the best loan amount than any other lender. He worked with us hand in hand, he is professional, and he made the process enjoyable.”
Jaina D.
Read More
"You can rely on them, very professional and quick in responding to your queries. He is very friendly and makes sure we understand the process and keeps us posted on the status of our loan. His efforts are greatly appreciated."
Cass Z.
Read More
“I called looking for information about the process of applying for a mortgage/refinance and am just blown away with how helpful the information I received was!”
Stephanie F.
Read More
“I have hope because of you for making my home ownership dream come true. I feel such a connection with you and am excited to work with you. Have an amazing day!”
Rachel S.
Read More
"Highly ethical, attentive and helpful! A fantastic combination of personable and hard working. He makes everyone feel important and understood."
Cliff S.
Read More
“Hands down the best mortgage professional I’ve worked with in 20 years. Knowledgeable, honest, reliable and above all an outstanding communicator.”
Jose A.
Read More
"He worked on getting the lowest rate and kept me informed on each step of the process from the beginning to closing. Thank You!"
Nicholas H.
Read More
“Thank you for your prompt help and AMAZING assistance. Hands down, best lender I have ever worked with. Top notch!”
Tiffany
Read More
“I would be 100% interested in working more with you! You have proven to be an amazing lender”
Sandy C.
Read More
“Absolutely the most knowledgeable, friendly and honest expert I’ve ever worked with!”
Steve R.
Read More
"A pleasure to work with. He was very prompt and courteous with his responses and genuinely cares about the clients he works with."
Kevin H.
Read More
"Professional, responsive and honest assistance with the whole refinancing process from beginning to end."
Previous
Next

We help you reach home ownership.

No catch. No hidden fees.

Have you served in the military or your community as a healthcare provider, teacher, or first responder? Are you a member of your local union or work for your city government?

Are you looking to buy a home but don’t know where to start when it comes to finding your best home financing options?

At Hero Home Programs™, our teams are dedicated to helping community heroes like you through the home purchasing process by finding the best grants, rebates, and loans in your area in order to maximize your savings and help you achieve homeownership.

Contact our team today to learn how we can and mortgages can change your life.

Resource Guides

Complete A to Z guides on your home purchase journey.

Learn about the process for getting a home loan

What steps you can take to improve your credit score

Tips and tricks for moving into your new home

Your step-by-step guide for buying a new home

Scroll to Top