September 6, 2017

HUD homes are homes that have been foreclosed on and now belong to the U.S. Department of Housing and Urban Development. These are generally homes that were once financed via FHA, VA, and USDA loan products.


  • Banks generally only care about the net proceeds of the sale, not the offer amount. There may be a certain amount of allowed closing assistance available, but keep in mind any and all reductions after the offer amount reduce the net to the lender.
  • When offering on these homes, keep in mind HUD Homes almost are almost always in multiple offer situations, especially once they come off the owner occupant grace period so you may want to write a strong offer.
  • Time is of the essence and if a buyer is not able to meet deadlines the lender is likely to just rescind the sale and place the home right back on the market.
  • HUD lists property condition reports on their websites so you can get a feel for what they have determined to be wrong with the home. HUD homes are either insured with repairs needed or uninsured.  Uninsured HUD homes have been determined by HUD to need over $5,000.00 worth of repairs. Insured HUD Homes will list what repairs are needed and what HUD estimates as cost to cure. FHA 203B qualified buyers must place the funds in escrow and repairs must be done within a given time after closing.
  • To get more information on HUD Homes prior to bidding it is always important to check the websites directly and not just MLS, which has limited information. Your Realtor can also try to find an old listing of the home to to check old disclosures. Most HUD homes were also listed as short sales or traditional sales with in the past 2 years so with some digging you can get a more complete picture of what may or may not be going on with the home.


Last Updated on January 10, 2023 by Minna Reid

About the author 

Minna Reid

Minna Reid is The Broker - Owner of Reid Real Estate Group. Reid Real Estate Group is a full-service Connecticut residential real estate brokerage, specializing in helping homeowners with legal and financial challenges including short sales, probate sales and tax lien complications.

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  1. I didn’t know that HUD homes will uninsured or have insurance but need repairs. Either way, I can work with it. My wife and I want to get a home that we can work on a little bit so sounds like a great place to start.

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