What Is a HUD House?
A HUD house is a residential property acquired by HUD, The U.S. Department of Housing and Urban Development, as a result of a foreclosure on an FHA insured mortgage. HUD then becomes the property owner and offers it for re-sale on the open market to recover the loss on the foreclosure claim by the previous mortgage holder.
The Federal Housing Administration or FHA is the largest government insurer of mortgages in the world and is part of the United States Department of Housing and Urban Development. FHA provides mortgage insurance on single-family, multifamily, manufactured homes and hospital loans made by FHA-approved lenders throughout the United States and its territories.
Almost anyone can purchase a HUD home. If you have the cash or can qualify for a loan (certain restrictions may apply) you may purchase a HUD owned property. HUD real estate is initially offered to owner occupant purchasers only. Following the waiting period for owner occupants, all unsold properties are made available to all buyers, including investors.