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Someone else’s misfortune can turn out to be the answer to someone else’s prayer of buying a house. HUD homes are houses the government acquired after a foreclosure on an FHA-insured mortgage. HUD then sells these homes to the public at a discounted price.
Check your home buying eligibility. Start here (Nov 11th, 2026)
Advantages of buying a HUD home
“HUD homes have always been around,” said Jack Gross, president of Better Homes and Gardens Real Estate Cassidon Realty in Bethlehem, Penn. “They list at their appraised value. But that doesn’t necessarily mean they sell at their appraised value.”
HUD does an appraisal on the property. It also weighs the pricing advice of area brokers and real estate professionals.
“They do sell at good prices and competitive prices. Sometimes, they are in need of a considerable amount of work. HUD is like any bank trying to sell a property that is distressed. The faster they can sell it, the better,” he says.
So, HUD may adjust the price of a home that sits on the market. HUD sells its $1 Dollar Homes to local governments, not individual buyers. Individuals can buy HUD homes through hudhomestore.gov bidding.
Some qualify for 50% discount off listing price
However, some people in certain professions can get a 50 percent discount off the list price of eligible properties. They qualify through HUD’s Good Neighbor Next Door initiative. This incentive aims to encourage the renewal of certain communities and neighborhoods by helping these workers buy homes there. Eligible buyers include law enforcement officers, pre-K through 12th grade teachers, firefighters, and emergency medical technicians.
HUD-approved nonprofit organizations can also buy HUD homes in direct sales at discounts of up to 30% off the list price. These organizations then fix up the homes to sell back to low- to moderate-income home buyers.
How to find and bid on HUD homes
A HUD-registered real estate broker must submit any bid on a HUD home. So, to see whether any homes are for sale where you want to live, go to the government website: hudhomestore.gov. You can click on the map and find the state you want.
HUD Home Store lists homes for sale in all states, and availability varies by market. It covers homes in Puerto Rico too. The listings usually show a few photos and the listing price. They also list the real estate agent or broker and the maintenance agency. That agency takes care of the property since it is empty.
On the list, you might also see a house icon. This means it is a HUD showcase, which is a move-in ready home. They also signify with the word new if it is a recent listing. It also will say if the home is uninsurable, meaning it doesn’t qualify for a standard FHA loan. People use cash or home equity loans usually to buy these types of fixer-uppers. An IE next to a home means the FHA appraiser rated it insurable with a repair escrow. In that case, you can get FHA lending. Your lender then sets up an escrow account to complete the required repairs after closing.
“HUD gives first options to buyers that make acceptable offers who agree to occupy the property. It just makes the person more community committed. The person living there has a sense of ownership and takes care of it,” Gross comments.
He adds that during the mortgage crisis, about 30 percent of his business was HUD homes.
Check your home buying eligibility. Start here (Nov 11th, 2026)
Who is buying HUD Homes?
Judy Williams, a marketer, and concierge in Racine, Wisconsin, feels lucky to have bought a HUD home.
“The home had been foreclosed on the previous owners who had just purchased it a couple of months before we got it,” she says.
The only immediate renovation she and her family needed was a new sewer line. That work had to happen before they could turn on the water. They bought the home outright with cash for $47,000.
The home is a brick arts and crafts bungalow from 1928. It has hardwood floors, four bedrooms, two bathrooms, and a detached 2-car garage. It also includes a fireplace, an enclosed porch, a fully finished basement, and a backyard.
“When we decided to look for our dream house, we each had a list. And this house had them all,” Williams says. “My husband and I had just married about a week before the closing. Since we both are frugal and because the home met our needs, it was the best decision we could have made.”
Why one buyer skipped the home inspection
The only snafu or problem that arose was the decision of whether to get a home inspection or not.
“We did find out that with a HUD home that things move quickly, and you have short windows of opportunity to get things done once you sign the purchase agreement,” she says.
The couple had about 48 hours to complete a home inspection. However, they would have had to pay to turn on the utilities for the inspection (gas, water, etc.). Then they would have paid again to turn them off until the closing.
“And even if the home inspector found something that we felt would be a problem moving forward, it would have been a moot point because we were under contract. And the only way [it] can be broken is if high levels of lead were found in the home,” she says. “So, we knew we loved the home, loved the price, and since we had no children, we decided to forgo the inspection and simply move ahead with the deal.”
Under current HUD rules, buyers get 15 days after HUD accepts the sales contract to inspect the home. During that window, a buyer can withdraw and ask for the earnest money back. That requires an inspection report showing serious problems HUD didn’t disclose, or proof of lead-based paint hazards.
Check your home buying eligibility. Start here (Nov 11th, 2026)
