Every week a new list of HUD homes become available.  Many are available for the $100 down payment program. These homes when in good condition usually sell within 7-10 days.  Please contact us for lists of HUD homes in your targeted areas.

General Questions/Buying a HUD Home

Q. What is a "HUD Home"?
The Federal Housing Administration (FHA) is the organization of the U.S. Department of Housing and Urban Development (HUD) that insures certain mortgage loans for lenders. If the lender forecloses on the loan, FHA repays the balance of the loan to the lender and the title to the home reverts to HUD. HUD then sells these homes at market value.

Q: Who can buy a HUD home? Are they only available for low-income buyers?
All HUD homes are offered without regard to race, color, religion, sex, national origin, handicap, or familial status. Anyone who is pre-qualified for a mortgage loan may offer to purchase a HUD home. These homes are not exclusively for low-income buyers, but most are regarded as affordable for low to moderate-income purchasers within the market areas where they are located. There is an initial period when only owner-occupants are allowed to purchase, after which time investors may also buy. No employee, relative, or business relation of the M&M Contractor or its subcontractors may purchase any of these properties.

Q: How do I start the process of buying a HUD home?
Start by finding a real estate agent in the area where you are interested who works for a HUD-registered broker. Be sure to ask if his or her broker is registered with HUD to sell these homes. These agents can help you get pre-qualified for a loan, show the available homes to you, write a Sales Contract for you to sign and place an offer by electronic bid on your behalf.

Q: Does HUD make repairs on HUD-owned homes that are in poor condition?
HUD homes are sold "as is," without warranty. That means HUD generally will not make repairs except to preserve and protect the property or to eliminate a major safety issue. Known defects are reflected in the price and stated in the listing on the Website, as well as on the Property Condition Summary sheet.

Q: How do I make an offer to purchase? What happens after I place a bid?
Your HUD-registered real estate agent or broker must place an offer in the form of an electronic bid on your behalf.  If your bid offers the highest price, net of closing costs and commissions, above the minimum acceptable price, then the bid will be acknowledged, assuming all other considerations are met. The bid will be the acknowledged bid listed in "Bid Results," allowing your agent or broker 48 hours to deliver a complete contract package to the appropriate Regional Office. The complete and signed Sales Contract package with all addenda, a copy of the loan pre-qualification letter, and your earnest money check. Only when a complete and correct contract package is submitted and received on time will the M&M Contractor sign on behalf of HUD as Seller. Otherwise, your bid may be cancelled and the property may be offered to the next highest acceptable bidder or it may be placed back on the market for others to bid.

Q: Can I buy a HUD home as an investment property?
Yes, but owner-occupant purchasers are given priority for an initial period of time that the house is on the market. These are persons who will affirm in writing that they have not purchased a HUD-owned property in the last two years and they will live in the home as their primary residence for at least one year. After the initial listing period, investors may purchase the houses for resale or for rental.

Electronic Bidding

Q: As an owner-occupant, can my agent bid for me on more than one house at a time?
Yes. If you are the highest bidder on multiple houses, the M&M Contractor will choose the one on which you will be acknowledged as the successful bidder. You will not be able to select which house so make sure that any home that you submit a bid on is one that you are prepared to close on!

Q: How will I know if the bid I submitted is acknowledged as the highest?
Check on the web site in the "Search Offer Results" section the morning after the bid deadline to see if yours is the acknowledged bid. PLEASE NOTE: Having your bid acknowledged does not mean you have "bought" the house nor that it is "sold." The M&M Contractor must receive your complete and correct contract package, review it for accuracy and sign it on behalf of HUD as the seller and only then it is considered "contract pending." When you "win" the bid, all that signifies is that you have the right to submit a contract package within 48 hours. Bids are subject to cancellation until the Sales Contract is signed because all real estate transactions must be conducted in writing, something that cannot occur until your contract package is checked and accepted, as indicated by the seller's signature on the documents. If your contract package does not come in on time, or is found to be incomplete or inaccurate, the bid acknowledgement may be cancelled and the next highest bidder will be given an opportunity to submit a contract package or the property may be placed back on the Internet for another round of bidding.

Q: Whose Social Security Number should be used in bidding? And who signs the Sales Contract?
Your agent will get the buyer's SSN and signature on the HUD-9548 Sales Contract before placing the bid electronically. The same name and SSN must be used on the bid screen. If there is more than one person buying the property together, your agent will use the name and SSN on the bid screen of the person whose financial statement is best from the lender's perspective, adding the other names and SSNs on the contract following the first one. Everyone who is buying and taking title to the property signs the contract and addenda. These bids and contracts are not assignable to anyone else. NOTE: Be sure to sign your name exactly the same way each time on all documents. The names and signatures must match the SSN given for that person.You must include the exact name as it appears on the social security card, including middle initial or middle name.

Q: How do I cancel a bid? And, can I then enter another bid instead?
The bid may be cancelled from the agent’s "My Buyers Center" within the BidSelect system prior to the bid opening. Please print a copy of the cancellation and retain for your records.

Q: I placed a bid on a property, but the next day it is still listed as available. Why?
Bids are reviewed the morning after a bid deadline and results are posted usually before noon. If the property is still available, then perhaps it is still too early and all bids have not been reviewed, so posting has not yet occurred. Check again later. The other explanation is that no current bid was acceptable. In that case, the property would remain available for further bidding and you may bid again.

HUD-9548 Sales Contract

Q: How do I get a copy of the HUD-9548 sales contract form?
The Sales Contract is available to download and print from our website. Go to " Property Listings: HUD Owned", pull up the listings you are interested in. Open the link called "Click Here For More Details." You will see a link which says, "Preview Contract Package." This link will allow you to print off a blank contract and blank addenda.

Q: If my contract is signed, but for some reason I cancel or cannot close, will I lose my earnest money deposit?
Per paragraph 12 of the Sales Contract, which the buyer(s) must initial, the earnest money deposit is at risk of forfeiture if the buyer cancels without good cause. There is an addendum to the HUD-9548 called "Forfeiture of Earnest Money Policy." Please read this carefully because it provides the HUD guidelines regarding what circumstances the deposit will be returned or forfeited.

Q: We sent in our contract package within 48 hours of seeing our bid acknowledged on "Bid Results." How will I know if everything is okay and the contract has been signed by the M&M Contractor?
Your agent sends the contract package by a delivery service that provides a tracking system so he/she will know that it was received in time. If there are any errors or omissions discovered when the package is reviewed, your agent will receive an "Urgent Notice" by email or fax at the number that the agent provided. An immediate response to complete or correct the contract package is required or the bid is cancelled. If there are no errors or omissions, the contracts are put in line for signature by an M&M Contractor employee who has power of attorney from HUD. After being signed, the contract is sent back to the agent by second-day delivery service. Remember, until your agent receives the fully executed Sales Contract, the property is not considered to be officially under contract.

Financing a HUD Home Purchase

Q: What kinds of loans are available to purchase HUD homes?
Neither The M&M Contractor nor HUD is a lender. The following are acceptable financing instruments for purchasing HUD houses: Federal Housing Administration (FHA) loans, Veterans Administration (VA) loans (subject to certain restrictions), Conventional loans and cash.

Q: Why do I have to get a pre-approval letter before I bid?
On behalf of HUD, the M&M Contractor acknowledges the bid that offers the highest net to HUD. However, the bidder must show evidence of the financial ability to close before a contract is entered into. This is to avoid tying up the property with a transaction that is unlikely to close. The " prequalification-letter" must be directly from the lender (not the mortgage broker) giving a current date and an amount of the loan that is acceptable. It should also name the buyer(s) whose credit report was reviewed and approved by the lender.

Q: Can I use Veteran's Administration (VA) financing?
Yes, unless the VA underwriter requires the seller to make repairs prior to closing. This requirement may be in conflict with HUD's policy to sell homes "as-is" except for preservation and protection of the home.

Q: My lender requires a copy of the appraisal and termite inspection report. How can I get these documents?
If you want these documents, the lender must directly request these reports from the M&M Contractor. The requests may be faxed to the regional office.

Q: Will HUD pay for any closing costs on behalf of the purchaser?
The ceiling on costs is 3% of the sales price in most states. Certain fees and expenses are automatically paid by HUD and do not have to be included in the total amount filled in on Item 5, such as an FHA appraisal and termite inspection. The Closing Agent and Listing Broker for your area should be available to assist your agent.

Q: How long do I have to close? What if I need more time?
Currently, transactions in most states must close within 30-60 days from the ratification date, the date the M&M Contractor signed the Sales Contract on behalf of HUD. For additional time, except in rare instances, an extension request signed by the purchaser and an extension fee paid by the purchaser must be submitted by your real estate agent/broker to the Closing Agent. Direct Sales to Non-Profit Organizations