HUD is a shorthand term for the U.S. Government’s Department of Housing and Urban Development. HUD’s mission is to increase homeownership, support community development and increase access to affordable housing, free from discrimination, for low- and moderate-income Americans. When someone with a HUD-insured mortgage cannot meet the payments, the lender forecloses on the home, HUD takes ownership of the home and pays the lender what is owed. HUD then sells the home as quickly as possible, often at a discounted price.
There is real potential for significant savings in buying HUD's foreclosed property.
HUD Homes are sold “as-is,” without warranty. That means that HUD will not pay to correct any problems. Even if a HUD Home needs fixing up (and not all of them do), it can be a real bargain! For example, HUD’s asking price on the home will reflect the fact that the buyer will have to invest money to make improvements. HUD might offer special incentives such as an allowance to upgrade the property, a moving expense allowance, or a bonus for closing the sale early. Keep in mind that on most sales, the buyer can request HUD to pay all or a portion of the financing and closing costs. Your real estate agent will have details. We encourage you to get the home professionally inspected before you make an offer so you will know what repairs you may have to make BEFORE you submit your bid.