Cheap HUD Homes (How To Find and Bid On It)

HUD Homes

Are you looking for houses which are great deals? HUD homes are the perfect answer for you. In this article, we are going to discuss how we can find a HUD home and bid on the house.

What is a HUD Home?

There are so many misconceptions about what a HUD home is? But I’m here to separate fact from fiction. First, 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?

Anyone who has the required cash, or can qualify for a loan, can buy a HUD Home. The homes are initially offered to owner-occupant purchasers (people who are purchasing the home as their primary residence). There’s an initial priority period precisely for owner-occupants, but after that, unsold properties are available to all buyers, including investors.

How to Find HUD Homes?

Finding HUD homes is very easy. All the HUD homes currently for sale are listed on this website These HUD homes are also listed in MLS sites such as or But, from our experience, we found that many times, HUD homes would not be available in the MLS site. That’s why if you are on the market exclusively for HUD homes, you need to search

HUD Homes Landing Page.

At the top of the landing page, there are few menus. However, only “Broker Search,” “BSCA Search,” “Property Contact” is helpful for you. Though there is a “Help” menu, however, all the information provided over there is geared towards a selling broker.

On the first page, you will see a US map. You can click on any state, and the website would show you a list of all the homes available in that state.

List of HUD Homes.

You may narrow down the search by county, city, zip code, street address, or even price range.

HUD Homes on Google Maps.

A list view may not be ideal for you. In that case, you may click on the “View Map” button. This would open google map with all the properties pinned down based on their address. This map view would give you a better idea of the property location.

If you click on any of the red pins, it will show you property address, price, bed/bath count, square footage of the house, and the year house was built. Now, if you click on the property address, it would open the property details page of this HUD property.

HUD homes property details page.

In this property details page, you would find all the juicy information of HUD homes, and this is the beauty of HUD property. Let’s learn about all the information available on this property details page.

Eligible Bidders: 

This tells who can bid on a property. If it says “Lottery,” then only police officers, firefighters, teachers, or nurses could buy this home. If you are one of these professionals, you need to buy this home. HUD offers a substantial incentive in the form of a 50% discount from the list price of the house during the Lottery phase. In return, the purchaser must commit to live in the property for 36 months as their sole residence.

However, most of the time, it would say “Owner Occupants” or “All Bidders.” If you intend to buy a HUD home as your primary residence, then HUD would give you priority over all other interested buyers, including investors. 

Bid Submission Deadline:

This is the deadline before which you have to place your bid. This could be a specific date and time or sometimes “Daily at Midnight.” If the bid submission deadline is “Daily at Midnight,” don’t freak out and don’t rush.

Property Info Tab:

In the property Info tab, HUD provides a lot of pictures of the property. Go through those pictures and first try to guess the property condition. Most of the time, you can quickly eliminate a property seeing those pictures.

In the “Listing Information,” three pieces of information are beneficial for us. List Price, FHA Financing Type, and is this property 203K Eligible? The List Price is straight forward. This is the price HUD wants to sell this property. But, in our experience, we found that most of the time, even if you bid 90% of this list price, the house would be yours. 

The “FHA Financing” types listed here are fundamental to determine the condition of this property without seeing it. If it says “IN (Insured),” then this house does not need any type of rehab at all. However, if it says “IE (Insured Escrow),” then this house needs work, but it would not exceed more than $10,000. Finally, if it says “UI (Uninsured),” then this is a big red signal. This house needs significant work, and the cost would exceed $10,000. 

203K Eligibility:

If it says “Yes,” then this is good news. You could qualify for a 203K loan and roll the cost into your FHA insured loan. 

The FHA 203K rehab loan is the best-known secret in real estate for the owner-occupants. It enables homebuyers to finance the purchase of a house and the cost of its rehabilitation through a single mortgage. The purpose of the loan is to fill a need for the homebuyer to repair or modernize the home without the relatively high-interest rates, short repayment terms, and or balloon payments. 203K insured loans save borrowers time and money.

There are generally two types of 203K loans. One, 203K Traditional Loan. This traditional 203K loan has a minimum requirement of $5,000 and can be used for structural repairs. The second one is the 203K Streamlined. The streamlined 203K loans are meant for homes that don’t require structural repairs and have a maximum cap of $35,000 in repairs. Both programs require repairs to begin within 30 days of the close of escrow be completed within six months. Please refer to your preferred lender for more information about the details of the 203K program. 

The types of improvements that buyers may make using 203K financing include the following:

  • Structural Alterations and Reconstructions.
  • Modernization and improvements to the home’s function.
  • Elimination of health and safety hazards.
  • Changes that improve the appearance and eliminate obsolescence. 
  • Reconditioning or replacing plumbing.
  • Installing a well and or a septic system.
  • Adding or replacing a roof, gutter’s, downspouts.
  • Adding or replacing flooring. 
  • Major landscape work and site improvements.
  • Enhancing the accessibility of a disabled person.
  • Making energy conservation improvements.
  • And much much more.

Now, click on the “Addendums” tab. Look for 2 files. One is the Property Condition Report (PCR), and another one is “Disclosures.” Sometimes, these 2 files would be present as a 1 pdf file. Open the property condition report (PCR). For every HUD home, HUD does an inspection and provides this report and disclosures. This report would tell you the condition of air-conditioner, electrical wiring, stove, oven, plumbing, roof, sewer, or septic systems. This is a good starting point to understand the property condition. This report would also provide a list of all the repairs this property needs. After seeing this condition report, if you feel comfortable moving forward, then you need to find a broker.

A selling broker is a must to bid on HUD homes. You can find a list of HUD registered brokers in your desired area by utilizing the “Broker Search” menu in Talk to your broker first and ask him/her whether he would help you to show the house and bid on the property. Sometimes, you can contact the listing agent to see the house too.

Do your due diligence in inspecting the HUD house. Before calling any professional home inspector, check the house by yourself first. These houses sit on the market empty for more than a year. Vacant homes always deteriorate faster than occupied homes. Bring flashlights and UV lights during your inspection. UV lights help to find water damage easily. During your inspection, look at the roof, sidings, downspouts, flooring, kitchen appliances, walls, paintings, bathrooms. Visit the basement and look for any water damage and cracks on the walls. Look for mud. Mud is a sign of termites. Look at the electrical panels, water heater, plumbing. These are all necessary preliminary inspection. If you are satisfied, then you can move forward on the next step.

Bid on the House:

Your broker would help you to bid on the HUD homes. However, before you make an offer, have your finances ready. If you are a cash buyer, you need your bank statement showing you have enough money to purchase the house. If you intend to take a loan, then have ready your pre-approved letter. You also need a money order or certified cashier’s check of $500 for homes that are less than $50,000 or $1,000 if homes price is more than $50,000 as earnest money deposit (EMD). The reason I’m saying you keep these ready before you bid on any HUD property because if your bid is accepted, HUD will give you only 48 hours to send all these documents. Otherwise, your bid would be canceled. 

Remember, HUD pays for the listing broker, your broker (selling broker), and sometimes the closing agent. If your broker (selling agent) asks you money other than the earnest money deposit (EMD), then walk away from that agent. He/she does not know or trying to scam you. Having an honest agent is crucial.

After the BID:

Almost always, HUD would notify your broker about the bid result the following day of the bid deadline. If your bid is accepted, you only have 48 hours to send all your preliminary paperwork to your asset manager, and EMD to the listing broker.

Helpful Terminology:

In a HUD home buying process, the following information is beneficial.

What does the Asset Manager do?

The Asset Manager is the HUD contractor responsible for the sale of the property. 

What does the Listing Broker do?

The Listing Broker was hired by the Asset Manager to assist with the marketing of the home. 

What does the Field Service Manager do?

The Field Service Manager is responsible for maintaining the property.


I hope this article would help you to find and bid on your next HUD homes.