I am a Real Estate Agent and HUD Home specialist based out of Norman, Oklahoma and serving the entire metro area including Moore, and Oklahoma City. The HUD homes are acquired when a mortgage holder defaults on a Federal Housing Administration (FHA) mortgage, which are goverrment sponsored loan guarantees designed to promote home ownership, especially for working class and lower income Americans.
HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
So just as the financial institutions do when properties come back to them as real-estate owned (REOs), the agency has real estate professionals represent their interest in selling these HUD foreclosures to the public through an established contractual process.
And if you bid on a home, and win the bid, you should be pretty sure you want to buy it, otherwise you’ll lose your $1000 EM. In addition, HUD homes are pre-inspected and may require you to put a set amount of money in escrow to pay for repairs (i.e. new roof, pluming problems, etc.).
While HUD doesn’t lend directly to the buyer specifically for the purpose of buying a HUD home, there are several options for specific cases in which buyers can qualify for FHA home loans, which many buyers find more convenient than dealing with a private bank or lender.