What is a HUD Home?

A HUD Home is an FHA insured mortgage that the bank has foreclosed on. Once this happens the lender submits the FHA insurance claim and conveys ownership of the property to the Department of Housing and Urban Development (HUD). HUD will then sell the home through their Asset Manager.

A HUD Home can be a Single Family Residence (SFR), Town home, Condominium or any other type of residence up to 4 units.

Sometimes you will see HUD properties listed as IN, IE, UI or UK  This pertains to the property’s “Insurability” for new FHA financing. Definitions below:

  • IN (Insurable) – Qualifies for FHA 203(b) financing and do not have Minimum Property Standard Repairs, may qualify for 203(k) financing which is a government rehabilitation loan for owner occupants only
  • IE (Insurable with Escrow) – Qualifies for FHA 203(b) with Repair Escrow, and has Minimum Property Standard Repairs of $5,000 or less. Repair escrow is buyer’s financial responsibility, added to the FHA loan.  It is NEVER a credit to the buyer, and does not apply if 203(b) financing is not available and utilized. 
  • UI (Uninsurable) – these properties do not qualify for FHA 203(b) financing. Typically, these properties have Minimum Property Standard Repairs exceeding $5,000 or may not meet other guidelines for FHA financing. 
  • UK (Uninsurable, 203(k) Eligible) – These properties do not qualify for FHA 203(b) financing, but may qualify for 203(k) or 203(k) streamline financing

 

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