A quick overview on what HUD is, what it’s not, and what it can be.

HUD stands for Housing & Urban Development. HUD stands for Housing & Urban Development. A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

The HUD Home Store is the listing site for HUD real estate owned (REO) single-family properties. This site provides the public, brokers, potential owner-occupants, state and local governments and nonprofit organizations a centralized location to search the inventory of HUD properties for sale. In addition, registered real estate brokers and other organizations can place bids on behalf of their clients to purchase a HUD property. THat would be someone like us. We represent buyers to want to purchase a HUD property. We have been doing this for XX years and have a great success rate, and dozens of very happy HUD home owners, many of which have gone on to purchase other homes after the required 3 years in the HUD home.

The HUD Home Store also includes many informative user-friendly features providing advice and guidance for consumers on the home buying process.

The following information is provided as an introduction to the process through which HUD homes can be purchased.

Anyone who has the required cash or can qualify for a loan (subject to certain restrictions) may buy a HUD Home.  HUD Homes are initially offered to owner-occupant purchasers (people who are buying the home as their primary residence). Following the priority period for owner occupants, unsold properties are available to all buyers, including investors.

HUD does not warrant the condition of its properties. This also means that they will not pay for the correction of defects or repairs. Since the new owner will be responsible for making needed repairs, HUD and Gemstone Realty, Inc. strongly urges every potential homebuyer to get an inspection from a licensed professional home inspector prior to submitting an offer to purchase. We can’t encourage you enough to do this. If you were in our family, we’d MAKE you do it, because we care. You don’t want to go through this process only to discover thousands of dollars of repairs are necessary, and then perhaps you don’t have the money to complete them. You want to have the full story before you go into this transaction process. We have a list of licensed, professional inspectors that we have trusted for decades. They will do a thorough job inspecting, and know where to look to find typical flawed areas due to age, weather, and negligence. THey know the area and common issues that plague homes that are in disrepair.

Here’s some good news, if you are interested in acquiring a HUD Home that is in need of repair, there are additional options for you. You have the option to apply for an FHA 203(k) Rehabilitation Loan. When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. By that time the home is no longer a great price, and is probably out of your budget. The FHA’s 203(k) Rehabilitation Loan is designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property.

We’ve been asked, “Does FHA Offer Any Special Discount Sales Programs?”

FHA (Federal Housing Authority) REO (REO stands for real estate-owned property: a type of property that has failed to sell at a foreclosure auction, has been claimed by the lender and is up for sale again.) properties located in designated Revitalization Areas are available at a reduced sales price to law enforcement officers, teachers, firefighters, emergency medical technicians, nonprofits and local governments. You can also view maps of REO properties and special programs such as Revitalization Areas with HUD’s Single Family Home Locator.

This is a very effective program for: law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians. They can contribute to community revitalization while becoming homeowners through HUD’s Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence.

But the clock is ticking on these properties. First, they have to be listed in the revitalization area, then you need to know they are only listed for seven days.

Here are details on the specific occupation qualifications:

Law Enforcement

You may participate in the Good Neighbor Next Door program as a law enforcement officer if you are employed full-time by a law enforcement agency of the federal government, a state, a unit of general local government, or an Indian tribal government; and, in carrying out such full-time employment, you are sworn to uphold, and make arrests for violations of, federal, state, tribal, county, township, or municipal laws.


You may participate in the Good Neighbor Next Door program as a Teacher if you are employed as a full-time teacher by a state-accredited public school or private school that provides direct services to students in grades pre-kindergarten through 12. In addition, the public or private school where you are employed as a teacher must serve students from the area where the home you are purchasing is located in the normal course of business.

Firefighter/Emergency Medical Technician

You may participate in the Good Neighbor Next Door program as a Firefighter/Emergency Medical Technician if you are employed full-time as a firefighter or emergency medical technician by a fire department or emergency medical services responder unit of the federal government, a state, unit of general local government, or an Indian tribal government serving the area where the home is located.

Eligible Single Family homes located in revitalization areas are listed exclusively for sale through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for seven days.

Jerald, Lynne and the team at Gemstone Realty, Inc., are here to help you through this entire process. Contact us to talk more about your next home, and possibly a HUD home. Let us help you determine if this is a fit for you.

Check the listings in Georgia:

Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits an offer on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD’s regulations for the program.

HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this “silent second” provided that you fulfill the three-year occupancy requirement.