HUD homes for sale: how to buy a HUD home, step by step

A HUD home is a house that the U.S. Department of Housing and Urban Development (HUD) took over after a foreclosure on a loan insured by the Federal Housing Administration (FHA). HUD sells it as is, by bid, through a HUD-registered real estate broker on HUDHomestore.gov, and owner-occupants can bid before investors.

This guide covers the steps and rules from HUD's own pages, as of October 5, 2026. HUD homes are not income-restricted homes sold by lottery. For those, see our guide to affordable homes for sale.

What is a HUD home?

HUD's handbook defines it as a one- to four-unit home that HUD acquired through foreclosure or other means on an FHA-insured mortgage, so HUD becomes the owner and sells it to recover the insurance claim it paid to the lender. HUD's handbook calls these properties real estate owned (REO). They are listed on HUDHomestore.gov. You can search by state, city, ZIP code, address or case number. Public users register on HUD's site to save listings and searches, and brokers register to place bids.

Who can bid, and when?

HUD's Home Store frequently asked questions page (FAQ) names five buyer types.

The listing periods are these. Every uninsured home starts in a 7-day Lottery period, and so do insured single-unit homes in revitalization areas. Insured homes outside revitalization areas start in a 15-day Exclusive period, insured revitalization-area homes get that period after the Lottery, and uninsured homes get a 5-day Exclusive period after the Lottery. After that comes the Extended period, which can run up to 180 days or stay open until the home sells. An "insured" home is one that can qualify for FHA-insured financing.

Do you need a broker?

Yes. HUD says only HUD-registered bidders can make offers, and homebuyers must use a HUD-registered selling broker or agent to bid for them. Most brokers are HUD-approved, according to HUD's FAQ. When your broker bids, the Home Store asks for names, addresses and email addresses for up to four buyers, the closing agent and the broker's designated signer. HUD prefers sales contracts signed electronically.

What condition are HUD homes in?

As is. A HUD listing disclosure says all HUD homes are sold in their as-is condition, and HUD will not make repairs or let the buyer complete repairs before closing. It tells buyers, "for your protection get a home inspection." For homes built before 1978 financed with FHA, a lead-based paint inspection is required, and stabilization may be needed. Questions about a specific home go to its listing broker or asset manager, not the Help Desk.

How can you pay for one?

HUD's handbook lists three FHA-insured routes for an insured HUD home.

• Section 203(b). The home meets HUD's minimum property requirements as is.
• Section 203(b) with repair escrow. Repairs of no more than $10,000 would make it meet the requirements, and an escrow account for the repairs is required.
• Section 203(k). The home qualifies only under this loan, which finances the purchase and repairs together.

A $100 Down incentive lets a buyer use FHA-insured financing with a minimum down payment of $100. HUD's listing disclosure says it is for owner-occupant purchasers using FHA-insured financing, so investors do not qualify. Our guides to FHA loan requirements and FHA vs conventional loans explain credit scores and insurance, which still apply. HUD's FAQ says a Good Neighbor Next Door buyer who qualifies for an FHA-insured loan also puts down $100.

What special programs does HUD run?

• Good Neighbor Next Door. HUD gives a 50% discount on the list price of eligible single-family homes in revitalization areas, only during the Lottery period, in exchange for living there as a main home for 36 months. HUD says the discount is prorated over those 36 months and that these homes are listed for seven days. Eligible buyers are full-time law enforcement officers, teachers (pre-kindergarten through 12th grade), firefighters and emergency medical technicians.
• Nonprofits. HUD says approved nonprofits can buy homes at discounts up to 30%, then rehabilitate and resell them to first-time and low- to moderate-income buyers.
• Dollar homes. Government agencies can buy qualified homes for $1 each. A home qualifies after 180 days on the market with an as-is value of $1 to $25,000.

What are the steps to buy?

1. Get pre-approved by an FHA-approved lender and ask whether you qualify for the $100 Down option as an owner-occupant.
2. Search HUDHomestore.gov and note each home's listing period and case number.
3. Find a HUD-registered selling broker or agent. The Home Store has a broker search.
4. Register as a public user if you want to save listings, and have your broker place the bid, with your closing agent's details.
5. Order an inspection if the contract allows it, and read the property disclosure.
6. Sign the sales contract electronically and close with your lender.

Before you commit, talk to a HUD-approved counselor through the housing counselor search.

How do HUD homes compare with below-market homes?

The below-market homes on our listings page are sold to income-qualified buyers by lottery, waitlist or first come, first served. As of October 5, 2026, we track 361 open homes for sale, and none mentions a HUD home or the Home Store in the text we collected. See the largest group on our Colorado page. Use our eligibility check to compare your income with the programs we track. What you type stays in your browser. Read what area median income means for how limits work, and first-time home buyer programs for help with the down payment.

How do you spot a scam?

The official listings are on HUDHomestore.gov, a .gov address. Be careful with sites that only look like HUD's. HUD's own search opens without a login, so a site that demands payment before it shows you listings is not behaving like HUDHomestore.gov. Confirm a broker is HUD-registered on the Home Store's broker search before you share personal details.