What is a HUD Home?
A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.
"HUD homes" is a term often heard in connection
with government-foreclosed homes. Actually, this is a misnomer, as all these
homes started out as homes that had loans backed by the Federal Housing.
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History
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HUD, the Department of Housing and Urban Development, is a department of the government responsible for a number of federal housing agencies and programs. One of these is the FHA.
Significance
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When an FHA-insured loan goes into default, the home then falls under the jurisdiction of HUD, which has the responsibility of disposing of it.
Features
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The originating lender is paid off by FHA, and the home goes back to the government as its owner, rather than going through normal foreclosure procedures. It is then administered by HUD for sale.
Process Of Sale
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Just as institutions do, HUD has real estate professionals represent its interest in selling these homes. A new loan must be taken out by the buyers of a HUD property.
Effects
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Either way, HUD properties are not hard to find. They may be listed by individual real estate companies or by multi-listing services, or you can contact your real estate agent or call your local HUD
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