HUD Home Information

What is a HUD Home? It is a home with an FHA insured mortgage that went into default. The lender acquires the home, submits an FHA insurance claim, then conveys ownership to the U.S. Department of Housing and Urban Development. HUD sells the home through their asset manager, Matt Martin, Real Estate Management. A HUD Home can be a single family home, condominium, mobile home, townhouse, or a multiple family home with up to 4 units. HUD Homes can be found at

Who can buy a HUD Home? A HUD Home may be purchased by any individual, company, HUD-approved non-profit organization, or government entity via financing or by paying cash. Interested buyers must submit bids through a HUD-registered real estate agent.  All agents at Gem State Realty are HUD-registered. For more information call 877-282-4377.

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HUD Home purchasers fall into two categories: Owner Occupants and Investors. An owner occupant is a person who will live in the home as their primary residence for at least 12 months and has not purchased another HUD Home as an Owner Occupant within the past two years. Investors are people who purchase the home as an investment or as a second home, or who do not qualify as an Owner Occupant.

How can I buy a HUD Home? If you are financing the purchase of a HUD Home, HUD first requires you to be pre-approved for a mortgage. If you are paying cash, the buyer must provide verification of funds.  All buyers must submit their bids online through a registered real estate office such as Gem State Realty.

Purchasing a HUD Home is not like typical transactions.  When purchasing a HUD Home, there are no negotiations between buyer and seller. HUD Homes are sold by a sealed bidding process.  All buyers submit their best offer.  Usually the highest netting bid (after all costs are paid) wins the sale.

Initially, HUD Homes are offered for owner occupant purchasers.  Following an owner occupant priority period, unsold homes are available for all buyers, including investors. Bids can be submitted any day of the week, including weekends and holidays, and are opened for review the next business day following the bid deadline.

Exclusive Listing Period: When a HUD Home is first listed for sale, priority is given to owner occupants, non-profit organizations and government entities. The duration of this period will vary depending on the homes FHA insurability.  Each home has a different exclusive listing period depending if it Insured, Insured with Escrow, Uninsured, or Uninsured 203k eligible.  Ask your Gem State Real Estate agent to explain each of these and how it applies to the home you are interested in.

When can investors submit a bid? After the Exclusive Listing Period has expired, unsold homes enter the Extended Listing Period. These homes are available for all purchasers, including investors, on a daily basis until an acceptable bid is submitted.  Bids are opened and reviewed the following business day.

How can I find a HUD Home? HUD Homes are featured here.

What is FHA Financing? HUD Homes may be purchased using cash, conventional loans, or other special financing. Additionally, FHA offers financing options that are tailored to HUD Homes. There are many variables that are taken into consideration when the disposition of a home is created. The condition of the home as reflected in the FHA-approved appraisal and the Property Condition Report weigh heavily in determining whether its insurable. Once the disposition of the home has been established, the home is initially listed at the as-is appraised value and will reflect the financing acronym that is appropriate. It is vital that real estate agents have a clear understanding of the FHA financing types, and the corresponding acronyms.  The real estate agents at Gem State Realty are a great source of knowledge for explaining these accronymns or additional information may be found at

Will HUD pay for any closing costs? HUD will pay up to 3 percent of the purchase price in closing costs that are considered to be reasonable and customary in the jurisdiction where the property is located.

Please remember that asking for closing costs will reduce the Net to HUD and may affect the competitive bidding ratio.  For more information, please contact a Gem State Realty agent.

 HUD does not pay any closing costs on Good Neighbor Next Door homes.

Can I have a Home Inspection? All HUD Homes are sold "As Is." HUD will not make any repairs. It is important that the buyer do a visual inspection prior to submitting a bid. The buyer is also encouraged to have a professional home inspection performed with the utilities activated after the contract has been accepted and signed by HUD. The buyer has a 15 day period after contract acceptance to activate utilities and complete the inspection.  This must be coordinated with the assigned Field Service Manager. 

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