HUD homes are acquired by the government when owners default on an insured government loan.  When HUD acquires a property they do clean-up and mininimal repairs.  The house is appraised and then listed for sale "as is".  When the house is listed for sale, the house is sold to the highest bidder which nets the most to HUD and is above the minimum amount required by HUD.  This minimum is substantially less than the list price, and the list price is typically much lower than similar houses sell for.  So the HUD homes can be a great investment opportunity for home buyers.   When the house is first listed for bidding, only owner-occupants can bid on the house.  If no owner occupant  buys the house within the first two weeks its on the market, then the bidding is open to everyone.   A new list of available houses is posted by HUD every Thursday morning.   The first round of bids have to be in by midnight the following Monday.  When the bids are opened Tuesday morning, the house goes to the highest bidder.  If no owner ocuppant purchases the house the first round of bidding, then the house goes to the daily bid list.  If no owner occupant purchases the property within the first two weeks, then anyone can bid on that property on the daily list.

To bid on a HUD property, you must go through an agent authorized to submit bids.  You must have a cashier's check for $1000.00, a loan pre-qualification letter from a lender (we have an inhouse lender that can do this for you), and the signed contract with your bid price to submit to HUD if you win the bid.  (Bids are submitted through the internet, but the written contract must be submitted to HUD when you win).