What is a HUD Home?

When someone with a Federal Housing Administration (FHA) insured mortgage in Denver or any other part of the country cannot meet the payments, the lender forecloses on the home; FHA pays the lender what is owed; and then the United States Department of Housing and Urban Development (HUD) takes ownership of the home. Then HUD sells it at market value as quickly as possible. A Marketing and Management contractor for HUD 1 to 4 unit residential properties is hired to manage the properties until sold. They will maintain and sell these properties in accordance with HUD guidelines.

How are HUD Homes Sold?
HUD homes are listed on the local Multiple Listing Service (MLS) and on the internet. Registered brokers and agents may place bids electronically on these properties on behalf of a purchaser. The bid with the highest acceptable net to HUD is selected as the provisional winner subject to timely receipt of all required documents. The best resource for active HUD listings in Colorado is here.

Who can buy a HUD Home?
Any individual who can qualify for a mortgage or who can pay cash may purchase a HUD home. Purchasers must use a broker or agent who is registered with HUD to place a bid on a property. Purchasers must also have a pre-qualification letter from a lender or proof of cash funds in the amount of or greater than the property they are purchasing.

Who can sell a HUD Home?
Any licensed real estate agent or broker who is registered with HUD may show and submit bids on HUD Homes. Please be sure that your broker has registered with HUD PRIOR to seeing HUD homes in Denver. PETE HAS A KEY!

Important Information about HUD Homes

HUD’s “AS-IS” Policy
All HUD homes are sold strictly “AS-IS”, this includes the responsibility of the purchaser to de-winterize the property. HUD does not make any repairs. There are no representations or warranties, expressed or implied, on any HUD property. HUD does not guarantee the condition of any property, FHA-insurable or not, nor whether it meets local codes or zoning requirements. Brokers should advise purchasers that there may be code and/or zoning violations on these properties and that it is the responsibility of the purchaser to identify these violations. Buyers are encouraged to have homes inspected by a qualified home inspection company to satisfy themselves as to the condition of the property at the time of sale.

Allowable Closing Costs -Line 5 of Sales Contract (HUD 9548-1/99)
HUD will pay up to a maximum of 3% of the purchase price, (Line 3 of sales contract), towards allowable purchaser closing costs, not to exceed actual costs incurred. Any monies remaining after the allowable closing costs have been paid will not be credited to the purchaser(s) at sales closing. These costs may only be used for specific items as stated on the Forfeiture and Extension Policy.