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HUD-owned homes
When an FHA-insured mortgage is foreclosed, HUD may take ownership and sell the home. HUD homes:
- Are listed on the HUD Home Store (hudhomestore.gov)
- Are sold as is; get an inspection before bidding
- Are bought through HUD-registered brokers who submit bids online
- Give owner-occupants priority during an initial bidding period before investors can bid
- May be eligible for FHA financing, including 203(k) renovation loans, or require cash/other financing if they don’t meet FHA standards
Good Neighbor Next Door (GNND)
- Who: full-time law enforcement officers, pre-K through 12th-grade teachers, firefighters, and emergency medical technicians
- What: buy an eligible HUD home in a designated revitalization area at 50% off the list price
- Requirements: live in the home as your only residence for 36 months; sign a silent second mortgage for the discount; must not have owned a home in the prior year
- How: homes are listed on the HUD Home Store for a short period; eligible buyers submit an interest through a broker, and HUD selects by lottery when there are multiple
“$1 homes”
HUD’s Asset Control Area and Dollar Homes initiatives let local governments and eligible nonprofits buy certain HUD homes for $1 to support community revitalization. Individuals can’t buy $1 homes directly from HUD, though some cities resell rehabilitated homes to buyers through their own programs. Be wary of websites selling lists of “$1 homes.”
Other public home sales
- VA-owned homes (VA REO) listed through VA’s contractor
- USDA Rural Development real estate owned properties
- Land bank programs in many cities that sell vacant homes at low prices with rehab requirements
- Tax sale properties (high risk; research title and occupancy)
Tips
- Get a pre-approval and a broker familiar with HUD homes.
- Inspect before bidding and budget for repairs.
- Consider FHA 203(k) to finance repairs. See home improvement financing.
Bidding on a HUD home step by step
- Get pre-approved for financing (or show proof of funds).
- Find a HUD-registered broker in your area.
- Search listings on the HUD Home Store; note the list price, bid deadline, and financing eligibility (FHA insurable, insurable with escrow for repairs, or uninsured).
- Inspect the property during available showing times (utilities may be off).
- Submit a bid through your broker during the owner-occupant priority period.
- Wait for results; HUD accepts the highest acceptable net offer.
- Close within the timeframe HUD requires; extensions may cost fees.
Financing categories
| Label | Meaning |
|---|---|
| IN (insured) | Eligible for standard FHA financing |
| IE (insured with escrow) | FHA financing possible with a repair escrow |
| UI (uninsured) | Not eligible for FHA financing; cash, conventional, or renovation loans only |
Good Neighbor Next Door details
- Eligibility is job-based: full-time employment as a law enforcement officer (sworn, with arrest authority), pre-K–12 teacher, firefighter, or EMT, serving the jurisdiction or area where the home is located.
- Silent second mortgage: equal to the discount, with no interest or payments if you meet the 36-month occupancy requirement.
- Annual certification: you must confirm you still live in the home.
- Limited inventory: homes are available only in designated revitalization areas and listings are brief, so check listings often.
Watch out for
- Homes sold “as is” with significant repair needs
- Tight closing timelines
- Paid websites claiming to sell exclusive HUD home lists
- Misleading “$1 home” marketing
Frequently asked questions
Can I buy a HUD home directly from HUD?
No. You must submit bids through a HUD-registered real estate broker. The broker’s commission is typically paid from the sale, and HUD may pay some closing costs.
What is the $100 down payment program?
HUD has offered a $100 down payment option for owner-occupant buyers using FHA financing on eligible HUD homes. Availability is indicated on the listing; confirm with a broker and lender.
Do I have to repay the Good Neighbor Next Door discount?
The discount is secured by a silent second mortgage that is forgiven if you live in the home as your sole residence for 36 months. If you leave early, you may owe part of it.
Sources and verification
Use these sources to check program rules. Funding, openings, and local procedures must be confirmed with the agency handling your application.
- HUD Home StoreU.S. Department of Housing and Urban Development
- Good Neighbor Next DoorU.S. Department of Housing and Urban Development
- Buying a HUD homeU.S. Department of Housing and Urban Development
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