Buying a HUD Owned Home is simpler than you think, as long as the Realtor you are using knows the process.  To buy a HUD Owned Home you must do first find a REALTOR that is HUD Certified and can actually sell them.   There should be a list at along with a list of homes for sale by HUD. There is specific Time lines and Bidding Rules along with Available Loans specific to HUD homes.   Having a Realtor and Lender that fully understands the rules and time lines is key.   When you find a property on on top of the screen it will say Bidding Rules.   Owner Occupant, Investor, Gov Agency Only.  It will also give a Bid Opening Timeline  x Days, x hours, x Min's.  When a property First hits the market its  Owner Occupied only and Days 1-10 for showings, on Day 11 they open the bids submitted and see if one meets there criteria, if not then the property Bid Deadline is Midnight every night so you will want to get your bids sent in ASAP.   

      HUD Homes are always SOLD  AS-IS and no repairs are made and you aren't allowed to make repairs yourself until you actually own the property. This can get confusing when you see HUD homes offering repair escrows.   That is for FHA Insured homes with 203 b financing.  Where you can get the FHA loan and the money will be escrowed and used for repairs after you close on the property.  A Good lender will understand these rules and help you through that process.

    Finding a good lender and getting Pre-Approved is very important.  You want to make sure the type of loan you are getting allows you to buy the house.  Some do not.   So Pre-Approved is a first step.  Call us and we will get you in touch with a good lender that knows there stuff.

   Some Myths about HUD Owned Homes.

1. I can always get the home cheaper if its a HUD Owned property.  They always take less. (FALSE)

  While sometimes true you can get a HUD home cheaper than listed price.  If its priced well to begin with then different buyers will submit lots of offers and the price will go up.  Sometimes HUD homes sell for more than listed price.

2. HUD Homes Need Lots of work. (FALSE)

 This may or may not be true.  Some HUD homes need nothing at all and are move in ready!  Some need minor cosmetic touch ups and yes there are some that need alot of work.   You should talk to your REALTOR to find out specific things with each HUD Owned Home

3. All Realtors Can Sell HUD HOMES.  (FALSE)

  Only REALTORS that are HUD Certified are allowed to actually place the bid for you online.

4.  This home says Repair Escrow.  That means they will give me that amount of Money at closing. (FALSE)

  The repair escrow is not given to you and is worked in with the loan and money is escrowed and the repairs are done quickly after closing and then paid directly to the company that did the repairs

5.  I can place the BID myself online at  (FALSE)

  You would need a Realtor that's certified to sell HUD homes to do this.

6.  I can't do any home inspections on a HUD Home.  (FALSE)

Hud recommends that you do a home inspection from a certified home inspector.


These are some of the common mistakes made with HUD Homes, but finding a good agent and a good lender will make this process as smooth as buying typical home for sale like anyone else.     If you have questions or would like to see any homes contact a member of the McNaughton TEAM.