A HUD REO property, also known as a HUD home or a HUD-owned home, refers to a one-to four-unit residential Property acquired by HUD as a result of a foreclosure on an FHA-insured Mortgage, whereby the Secretary of HUD becomes the property owner and offers it for sale to recover the mortgage insurance claim that HUD paid to the Mortgagee.

 Listing Codes


All properties listed as "INSURABLE" are eligible for FHA financing. All requests for insurance will be under Section 203(b) of the National Housing Act Program. An interest rate will be charged on the loan and is negotiable between the purchaser and the lender. The mortgage may include some mortgage insurance payments.

IE- Insurable with Escrow Repairs

properties listed as "INSURABLE WITH ESCROW REPAIRS" means that certain repairs ( not to exceed $5,000.00) are required to meet Minimum Property Standards for an FHA mortgage. These Properties can qualify for FHA section 203(b) mortgages if the purchaser and lender establish a repair escrow at the closing for the completion of repairs within 90-days of the closing.

UI - Uninsured:

Properties listed as "UNINSURED" means that certain repairs and or improvements are required to be eligible for an FHA 203(k) mortgage. The required repairs on most of these properties exceed $5000.00. Purchasers of these properties have the option to purchase "as-is" with cash or conventional financing. These properties are also eligible for an FHA 203(k) mortgage if the required repairs and/ or the improvements are completed within 90-days of the closing.

Available Mortgage Products:

FHA 203(b)- the standard FHA loan that does not call for repairs to the home other than possibly repair escrows ot to exceed $5,000.

FHA 203(K)- loan program that allows the borrower to obtain money within the financed loan to make necessary repairs. if a home requires more than $5,000 of repairs the borrower takes a loan out for the amount of the sales price plus the estimated repair cost. Then after closing and fun ding the burrower hires the contractors to perform the work and turn over final invoices to the lender for the payment of those invoices. The lender handles all the payment of the invoices and usually requires a third part inspector to verify the work was completed before final payment is released.

FHA Streamline 203(k)- a program that permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before moving in. Homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser. Homeowners may make property repairs, improvements, or even prepare their home for sale.

Conventional- this type of mortgage uses cash or a bank loan that does not involve FHA financing.

Veterans Affairs (VA)-Eligible veterans can use this type of financing to obtain a VA-guaranteed loan. For more information on this type of mortgage.


Good Neighbor Next Door: is a sales incentive which permits an Owner-Occupant Borrower who is a full-time law enforcement officer, teacher, firefighter, or emergency medical technician who meets HUD requirements to purchase a specifically designated HUD REO Property located in a HUD-designated revitalization area with FHA-insured financing at a 50 percent discount from the purchase price.

This program enables eligible program participants to purchase, at a 50 percent discount from the list price, a specially designated HUD-acquired single-unit home that is located in a HUD-designated Revitalization Area. In return, the eligible purchaser must:

  •  Own and live in the home as his/her sole residence for a term of 36 months and Execute a note and  second mortgage on the home, payable to HUD for the difference between the list price and the discounted sales price.


  •  Borrower must live and work in the community,  the property is located in and be employed as a: Law Enforcement Officer, Pre-kindergarten through 12th grade Teacher or Firefighter/Emergency Medical Technician.


Homeownership Requirements:

  • Borrowers may not own any other residential real property for the past one year

$100 Down

The $100 Down Sales incentive permits a Borrower to purchase a HUD REO Property with FHA-insured financing with a minimum down payment of $100. $100 down  purchases may be processed as Section 203(b) or 203(k) Renovation loan. Minimum cash investment of only $100 plus closing costs and pre-paids that may not be included in the mortgage.

Closing Extension Policy


Closing Extension Request: if the closing does no occur on the specified date on line 9 of the HUD Sales Contract 9548, the Broker should contact HUD's Closing Agent at least two weeks prior to that date to request an extension

AM Contractors, as HUD's Representative, may grant an extension of closing time and, if approved, each extension will be for a period of fifteen(15) days:

  • Submit the "Request For Extension of Closing Date" ( Extension Request form) and all the required supplemental supporting documents to HUD's Closing Agent prior to the expiration of the sales contract.
  • Documentation submitted with the extension request must establish that a closing can reasonably be expected to occur within the extension period
  • The extension request must be accompanied by a cashier's check, money order other certified funds in the appropriate amount and made payable to HUD. The fee is based on the Contract Sales Price:


Contract Sales Price                                                            Extension Fees

Equal to or less than $25,000.00                                       $150.00 ($10.00 per day)

$25,000.01 to $50,000.00                                                 $225.00 ($15.00 per day)

$50,000.01 and over                                                         $375.00 ($25.00 per day)


  • The initial 15-day extension will be provided for owner occupant purchasers, at no cost, if documentation is provided indicating that proper and timely loan application was made, that the delayed closing is not the fault of the purchaser and that mortgage approval is imminent.


  • The extension fee will be retained by HUD. In the event that the purchaser closes prior to the end of the extension period, the unused, prorated portion of the extension fee will be credited to the amount due at closing.


  • The approval of an extension does no obligate AM Contractor, as HUD's Representative, to grant future extension


Broker Registration and NAID

As Broker, Nonprofit, or Government Agency, you can make an offer on a HUD Home only if you have a HUD Name Address Identifier (NAID). To apply for a NAID, http://www.hudhomestore.com/hud/NaidRegistration.aspx

So in order to place a bid on a HUD property, you must have an active NAID. You may obtain a NAID by completing the necessary forms and providing all required attachments to the HUD Homeownership Center which has jurisdiction over the state in which you are located. The NAID application package must contain the documents as listed at http://www.hudhomestore.com/hud/Naidregistration.aspx. If your application package does not contain the required documents, the package will be returned and extend the processing time. The NAID application processing time is am minimum of 2 weeks.

For Selling Brokers: Only Selling Brokers may obtain a NAID. Real Estate Agents must use the NAID of their Selling Broker to submit bids.


HUD Bid Process

HUD Homes: Sold "As Is" without warranty.

Irregularities in Bids: in accordance with Housing notice 92-96 with reference to HUD Handbook 4310.5, HUD assumes no liability for errors in the EMRF and/or Sales Contract. HUD continues to reserve the right to reject any and all bids and to waive any informality or irregularity in any bid. Properties are subject to withdrawal or change without notice.

Code  and Zoning Violations: Brokers should advise Purchasers that the properties may contain code and/or zoning violations. Code and Zoning status must be determined by the purchaser.

Property Condition: there will be no guaranties and/or warranties made. No repairs will be performed on the property by HUD after closing. Purchaser are encouraged to have the properties inspected by a qualified home inspection service company to ensure that they are fully aware of the condition of the property.

Potential Purchasers: Contact a HUD Approved Broker to obtain a copy of the current listings, to visit listed homes or to make an offer. HUD pays closing cost up to 3% of the purchase price, IF inserted on line 5 of the sales contract.