How to Obtain Finaincing

Although HUD is not a lending institution, purchasers of HUD homes may qualify for FHA-insured mortgages. However, the buyer of a HUD home foreclosure is not required to use an FHA-insured mortgage to purchase the home.

The buyer can use conventional financing with either a fixed-rate or adjustable-rate mortgage (ARM). Or, the buyer can apply for an FHA-insured loan, allowing the purchaser to use a low down payment. The purchaser does not have to be a first-time home buyer to qualify under the FHA insurance program.

There are also VA loans from the U.S. Department of Veterans Affairs, another government agency that guarantees the lender against loss due to borrower default.

Lastly, the purchaser may also qualify to assume the existing loan on the HUD home, allowing him or her to keep paying the same mortgage payments the previous owner was making before the foreclosure.