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How to Sell HUD Homes

The following information is provided to as an introduction to the process through which HUD homes can be purchased and resold. You can either scroll down the page, or access specific topics through the following topic menu. Additional links provided in the menu to the right provide access to FHA program and policy information for homeowners, homebuyers, and members of the mortgage lending and real estate industries.

HUD HOMES TOPIC MENU

 -   How Are HUD Homes Sold?
 -   Who Can Sell HUD Homes?
 -   General Sales Conditions
 -   Available HUD Properties
 -   HUD Homes and Other FHA Programs

How Are HUD Homes Sold?
When a HUD Home becomes available for sale, it is listed on  HUD Home Store (and usually on the Multiple Listing Service). Any real estate broker who is properly registered with HUD may submit contracts for purchase. Brokers are used because of their expertise in the local residential real estate market and because HUD does not have sufficient staff to show properties to prospective buyers or to assist in those other aspects of homebuying normally handled by brokers.

Before FHA properties are publically listed for sale, they are first evaluated to ascertain if they qualify for direct, exclusive sale to units of local government and FHA-approved nonprofit organizations. Generally, these properties are located in designated Revitalization Areas.

FHA REO properties that are not sold under any special programs are listed on HUD Home Store and offered on an exclusive, priority basis to owner occupant purchasers (people who are buying the home as their primary residence). Following the Exclusive Sales Period, unsold properties are then made available for purchase to all interested buyers, including investors, under the Extended Sales Period. Other sales include:

  • $1 Homes: HUD properties that have been offered for sale for one-hundred-and-eighty (180) days and that are not under a sales contract will be offered for purchase to local government agencies for a sales price of $1, along with applicable closing costs.
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Who Can Sell HUD Homes?
In order to qualify to sell HUD Homes, real estate brokers must complete and sign the following forms and any supporting documentation, and submit these to your local HUD Homeownership Center: SAMS 1111 Broker application and the SAMS 1111A Selling Broker Certification. Once this has been accomplished, and you have received a HUD-issued name and address identification number (NAID) you can show, advertise, and submit offers on HUD Homes.  Detailed instructions on how and where to submit your applications are available  here.

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General Sales Conditions
HUD Homes are sold in their "as-is" condition. HUD does not warrant the condition of its properties and will not pay for the correction of defects or repairs. Since the new owner will be responsible for making needed repairs, HUD strongly urges every potential homebuyer to get a professional inspection prior to submitting an offer to purchase. Because of HUD's as-is policy, HUD Homes can often be a great opportunity for those homebuyers in search of a "fixer-upper". Not every HUD Home needs fixing up, but when one does, it can be a real bargain. For example, HUD's asking price on the home reflects the appraised value in its current ("as-is") condition, unless otherwise specified.

While HUD does not provide direct financing for the rehabilitation of REO properties, FHA does provide rehabilitation financing assistance through the  203(k) Rehabilitation Loan Program. Also, keep in mind that on most sales the buyer can request HUD to pay up to 3% of their financing and closing costs.

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Where Can I Learn About Available HUD Properties?
Any single family property acquired by HUD FHA will display a sign identifying who is managing the property before it is listed for sale. During this time the property is appraised, title issues are resolved, if necessary, and a determination is made about the property's eligibility for HUD's discount sales programs. Listings are posted on HUD Home Store. For more information, contact the   Management and Marketing Contractor serving your area.

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Where Can I Find Further Information about HUD Homes and Other FHA Programs?
If you have more questions, contact the  Management and Marketing Contractor that manages the FHA housing portfolio in your community. You may also log onto the  FHA Resource Center for more information about FHA and its various programs.

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