I’ve sold quite a few HUD homes lately, so I figured I would give you guys a general overview of the process, and how it works in the Huntsville Metro Area. Buying a HUD home can vary from state to state, so this post will focus on Alabama.

What is a HUD Home?

As defined by HUD: 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.

Who can buy a HUD Home?

Almost anyone! If you have the cash or can qualify for a loan (subject to certain restrictions) you may buy a HUD Home. HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

Where can I find a HUD Home?

Well, my website of course!!! Click here to view ALL HUD homes currently for sale in our market. Check frequently! HUD homes are updated with new listings EVERY FRIDAY, although they don’t update on the website until Saturday morning. If you want them on Friday, just email me (seth@level10realty.com) and I’ll send them as soon as they’re listed.

How do I buy a HUD Home?

Buying a HUD home is a slightly different process than buying any other normal home. As I stated before, HUD homes are listed for sale every Friday. From the time they are listed, there is a 10 day initial bidding period. It’s similar to a sealed bid auction. You don’t know how many bids there are going to be and you don’t know for how much. You simply make your highest and best offer.

This initial 10 day period gives the owner-occupant priority to buy the home. Essentially, if there are two similar bids from an investor and an owner-occupant, the home is sold to the owner-occupant. After the initial 10 day period, if the home has not sold, bidding is accepted with no priority given.

Once a bid amount is decided, the paperwork is filled out, and the bid is submitted electronically. Once received, we are given a confirmation number and we simply wait to find out the results! The rest of the buying process is nearly identical to any other home.

What are the benefits of buying a HUD home?

There are two types of people that buy HUD homes. Investors and savvy homeowners. Investors buy for the obvious reason; it’s an investment. Investors know that they can put some work into the home and resell or rent it out. By renting it out, the investor is also able to pick up some major tax advantages as well.

The savvy homeowner realizes that buying the right HUD home can be an investment in their future. Not all HUD homes fit the bill, but with the right guidance and research, we can find one that does. All it takes is finding the right home, putting in the proper work to maximize its future value, and then waiting to cash in on the investment.