When homeowners default on their FHA loan, HUD takes ownership of the property, because HUD oversees the FHA loan program. These properties are called either HUD homes.
When someone purchases a home with a HUD-insured loan and defaults on it, HUD eventually evicts the homeowner and puts the home on the market to recoup some of its losses.
As an owner-occupant, you can qualify for a HUD home if you plan to live there for at least a year and haven’t purchased any other HUD homes within the last two years.
A list of HUD real estate owned (REO) properties for sale may be found at HUDHomestore. You can use the website to filter results by state, county, and ZIP code.
Housing and Urban Developmen (HUD) homes are appraised and priced at or near their fair market value. This price is determined by the marketing and management contractor.
HUD doesn't directly finance HUD dwellings. There are other possibilities, including VA loans, USDA loans for rural development, conventional mortgages and FHA loans.
The down payment required for your HUD house will vary depending on the loan type, the lender you choose, and your financial status.