10/08/2026
With foreclosures expected to rise in the future, here is a quick summary of how a buyer can find and purchase a HUD foreclosure. Be in the know, so you are ready to buy when the time comes:
A HUD home is a 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.
Once a HUD home is available for sale, it can be found at www.hudhomestore.com under one of the following listing periods:
1. Lottery - During this period, the property is only available for government agencies and nonprofit organizations to place a bid.
2. Exclusive - During this period, the property is available for owner-occupant bidders, as well as government agencies and nonprofit organizations.
3. Extended - During this period, the property is available for all bidders, including investors.
All bids must be submitted by a HUD registered real estate broker. Please contact us if you are interested in placing a bid on a HUD property.
Information needed to place a bid:
Be prepared to provide your real estate broker with the following information to place a bid:
1. A copy of your driver's license to confirm your identity
2. Your current address
3. Your phone number
4. Email address
5. Your social security number
6. Offer amount
7. Type of financing, i.e. Conventional, FHA, VA, Cash, etc.
8. Amount, if any, you would like HUD to pay toward your closing costs (up to 3% of purchase price)
What you will need if your bid is accepted:
Once your bid is accepted, your real estate broker will review the bid information. You will need to provide the following items for your broker to upload into the bidding system:
1. A pre-approval letter from your lender, or a proof of funds letter if you are paying cash. Your pre-approval letter must include the following information:
• Must be on bank letterhead
• Date (within the last 30 days)
• Name of the borrower / buyer
• The letter must say "credit has been reviewed" (financed purchases only)
• Specify the type of loan, i.e. FHA, VA, Conventional (financed purchases only)
• The amount for which you are pre-approved (financed purchases only)
• The letter must state you have the funds to close (cash purchases only)
• Must be signed by a representative of the lender
2. Earnest money in certified funds payable to the title company you plan to use for closing. $500 earnest money is required for all properties with a purchase price of $50,000 or less. $1000 earnest money is required for properties with a purchase price of $50,001 or more.
After the bid has been confirmed and documents uploaded, HUD’s asset manager, Raine, will generate an e-signature envelope for you to sign the contract digitally. Once all parties sign the contract documents, the offer is accepted. At this point, you will have 15 days to complete a home inspection. There may be a re-winterization fee if you choose to have an inspection (actual fee varies). All utility activation and inspection charges will be at your expense.
Empire Real Estate is a HUD listing broker; therefore, very knowledgeable about HUD properties. Please contact us for additional information or questions regarding the HUD bidding process. We offer free training sessions to buyers and real estate professionals.
