If you are interested in acquiring a HUD home below market price, you are not alone! HUD properties can make excellent investments or even be a remarkably cheap way to purchase yours forever home.

What is HUD? 

HUD is an acronym for the United States (Department of) Housing and Urban Development. You can see why this initialism is commonly used. HUD was initially formed to ensure that all United States citizens have “fair and equal” access to housing. 

What are HUD Homes?

‘HUD homes are properties that have been foreclosed, and the Department of Housing and Urban Development owns these homes now. You might assume that this means that HUD offers mortgages to homebuyers. Unfortunately, this is a common misconception; they don’t provide loans. 

So, how do they acquire properties through foreclosure if they are not lenders? Good question. HUD doesn’t provide home loans directly, but they do insure mortgages for private lenders, specifically FHA loans. When an FHA loan defaults, HUD will compensate the private financial institution that issued the mortgage and thus acquire the property. 

Are HUD Homes a Good Deal?

HUD homes can be a great deal under the right circumstances. The Department of Housing and Urban Development owns many properties and acquires more daily. They aren’t renting these homes out. The longer they have these properties, the more interested they are in offloading them to recoup some of their losses. Furthermore, since all HUD homes are foreclosures, they may require some repairs.  

A buyer willing to put work into fixing a property stands a chance to negotiate an even better price on a house. So, if you are in the right place at the right time, you can get a fantastic deal on a HUD home. 

How Do I Find HUD Homes?

Are you interested in acquiring a HUD home for yourself? Fortunately, finding them is pretty straightforward. 

Official Website

To greatly simplify your search, the Department of Housing and Urban Development lists all homes for sale on its website. Every property is sold by auction, and their website conveniently organizes its properties by state. To find a HUD home in your area, you can visit their website and navigate your state from the homepage. 


Given that HUD is a federal agency, they have preferences on who they help first. The first round of bidding is open to only some buyers. They prioritize potential buyers looking to live in the home (owner-occupied), non-profits, and other government agencies. If you are an investor, you aren’t entirely out of luck. If a home auction makes it through the first round of bids, it becomes available to all parties. 

Do Your Research

The low prices of HUD homes can seem too good to be true, and sometimes they are. Before you commit to a specific property, assessing the home’s condition and estimating the house’s fair market value is crucial. HUD homes are easy to find and can make for a great home-buying experience if you are careful.