The Federal Housing Administration (FHA) is the organization of the U.S. Department of Housing and Urban Development (HUD) that insures certain mortgage loans for lenders.

If the lender forecloses on the loan, FHA repays the balance of the loan to the lender and the title to the home reverts to HUD.

HUD then sells these homes at market value.

Q: How do HUD's Management and Marketing (M&M) Contractors acquire the house?

HUD has assigned the responsibility to maintain and sell the homes to Management and Marketing (M&M) Contractors.

They are responsible for the upkeep of the property and the required documentation associated with marketing and selling the homes according to HUD policies and guidelines set forth in the contract with the federal government.

 The M&M contractors act on HUD's behalf, but HUD retains the title to the home until it is sold.

Q: Who can buy a HUD home? Are they only available for low-income buyers?

All HUD homes are offered without regard to race, color, religion, sex, national origin, handicap, or familial status.

Anyone who is pre-qualified for a mortgage loan may offer to purchase a HUD home.

 These homes are not exclusively for low-income buyers, but most are regarded as affordable for low to moderate-income purchasers within the market areas where they are located.

There is an initial period when only owner-occupants are allowed to purchase, after which time investors may also buy.

No employee, relative, or business relation of the M&M Contractor or its subcontractors may purchase any of these properties.

Q: How do I start the process of buying a HUD home?

Start by finding a real estate agent in the area where you are interested who works for a HUD-registered broker.

 Be sure to ask if his or her broker is registered with HUD to sell these homes.

These agents can help you get pre-qualified for a loan, show the available homes to you, write a Sales Contract for you to sign and place an offer by electronic bid on your behalf.

Q: Is it possible to get a list of the properties in my area?

You may keep informed about available HUD homes by viewing the property listings on this Web

 site.

Q: Does HUD make repairs on HUD-owned homes that are in poor condition?

HUD homes are sold "as is," without warranty.

That means HUD generally will not make repairs except to preserve and protect the property or to eliminate a major safety issue.

 Known defects are reflected in the price and stated in the listing on the Website, as well as on the Property Condition Summary sheet.

Q: How do I make an offer to purchase and what happens after I place a bid?

Your HUD-registered real estate agent or broker must place an offer in the form of an electronic bid on your behalf.

 If your bid offers the highest price, net of closing costs and commissions, above the minimum acceptable price, then the bid will be acknowledged, assuming all other considerations are met.

The bid will be the acknowledged bid listed in "Bid Results," allowing your agent or broker 48 hours to deliver a complete contract package to the appropriate Regional Office the complete and signed Sales Contract package with all addenda, a copy of the loan pre-qualification letter, and your earnest money check.

  Only when a complete and correct contract package is submitted and received on time will the M&M Contractor sign on behalf of HUD as Seller.

Otherwise, your bid may be cancelled and the property may be offered to the next highest acceptable bidder or it may be placed back on the market for others to bid.

Q: Can I buy a HUD home as an investment property?
Yes, but owner-occupant purchasers are given priority for an initial period of time that the house is on the market.

These are persons who will affirm in writing that they have not purchased a HUD-owned property in the last two years and they will live in the home as their primary residence for at least one year.

 After the initial listing period, investors may purchase the houses for resale or for rental.