Finding FHA Homes for Sale

FHA homes for sale are homes acquired by the US Department of Housing and Urban Development through the foreclosure of an FHA-insured mortgage. The Federal Housing Administration (FHA) is a US government agency and a part of the HUD that aims to improve housing standards and conditions, provide an economic funding system for homes by insuring home mortgages, and stabilize the mortgage market. Mortgage insurance is provided to ensure that lenders will be paid of mortgage balances if a homebuyer is no longer able to make payments. By insuring a mortgage loan, families can have a mortgage loan approved without or lesser down payment. The insurance can also lower the cost of the mortgage loan.

FHA homes, more commonly known as HUD homes, can be new or used. The home can be a one- to a four-unit home, a townhouse, or a condominium. They are sold in their actual conditions without warranty.

Residential Properties

Residential properties acquired by HUD would first be managed before being listed for sale—the property is appraised, title issues are resolved, and eligibility for HUD’s discount sales program is determined. Afterwards, the properties are made available for sale on the Internet and the Multiple Listing Service.

FHA homes for sale are listed at HUD’s website and on the Multiple Listing Service. These homes would first undergo a “priority period” in which the homes would be offered to homebuyers who are looking for a home to serve as their primary residence. All unsold properties after the priority period would be opened up for all other buyers, like real estate brokers and investors, at a fair market price. In this “offer period,” any HUD-certified real estate broker or buyer may then turn an offer for purchase. The bid that provides the highest net return to HUD will be accepted. The broker with the accepted bid would be notified within 48 hours and would then be requested to turn in contracts for purchase.

Qualify with HUD

Real estate brokers who wish to sell FHA homes must be qualified by HUD. First, the broker should sign HUD’s Selling Broker Certification forms. These forms are: SAMS 1111 Broker application and SAMS 1111A Selling Broker Certification. After accomplishing these forms, the broker may then turn in offers on HUD homes. A broker would be paid a commission of up to 5% of the selling price, or whatever is indicated in the contract. Brokers could contact their local Management and Marketing Contractors for further information and instructions.

Links to FHA homes for sale can be located through Homes and Communities, the website of the US Department of Housing and Urban Development. The actual Homes and Communities website have real estate listings for every state. The site also has links to websites of other government agencies that have homes for sale.

Free Foreclosure Database offers free home search services per state. Subscription is free and membership is not required.