How To Buy A HUD Home HUD homes are houses acquired by the U.S. Department of Housing and Urban Development (HUD). If a foreclosed home was purchased with a loan insured by the Federal Housing Administration (FHA), the lender files a claim for the balance due on the mortgage. The FHA pays the claim, then transfers ownership of the property to HUD, which sells the home. The properties include single family homes, townhouses and condos, and often are in poor condition. HUD homes are priced at fair market value for their location based on appraisal. If the home is in need of repairs, the price is adjusted according to the cost of repairs the buyer will have to make. HUD homes are typically les…