Homebuyer HUD Tips

Homebuyer HUD Tips

Work With Someone Knowledgeable About HUD Homes

To help ensure a smooth purchase process, work with an agent familiar with the HUD process.  A licensed real estate agent with a valid HUD NAID number can help you.


Submit Your Bid Early in the Bidding Period

Even though your bid may be entered at anytime prior to the expiration of the bid deadline, it is important to get your bid in early.  HUD will accept the first bid that hits their required net.

HUD does not ask for "highest and best" offers like other GSEs or REO sellers, so it is important to submit your highest and best offer the first time to give yourself the best opportunity to win.  


Have Your Bid Held as a Back-Up

Ask your agent to have your bid held as a back-up offer.  If your offer is not the winning bid, and your bid is held as back-up, this will give you another opportunity to win the bid if something happens to the first offer.  If the first offers falls through, HUD will go back to all back up bidders first before seeking new bidders.


Closing Costs Assistance

HUD will pay up to 3% closing costs assistance for actual closing costs incurred. If actual closing costs are less, then that is all that is paid.  Investor buyers are also eligible for closing costs assistance. Closing costs assistance must be written into the contract.  Note that the amount of closing costs assistance you ask for will lower the net to HUD and in a competitive bid situation, may hurt your chances of your offer being accepted. 


Know HUD's EMD Policy

Be aware of HUD's EMD policy, especially if you are purchasing HUD homes as an investment.   EMD is almost never returned if an investor does not close, even for inspection purposes.

For investors:

  • For UI properties, 100%  of the EMD is forfeit regardless of the reason
  • For IE properties 50% may be forfeit if the buyer is determined by HUD or a direct endorsement underwriter to 
  • be an unacceptable buyer.  100% if forfeit if the sale fails to close for any other reason.


Be sure to check out this helpful inforgraphic: "How to Successfully Buy HUD Homes"


Liz Schuyler
Liz Schuyler
Realtor