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How Do You Buy A Hud Home With $100 Down

Hey there! Looking to finally buy your own home, but don’t have a ton of cash for a down payment? I feel you. That was me not too long ago. But I recently learned about an awesome program from the U.S. Department of Housing and Urban Development (HUD) that lets you buy certain homes for just $100 down! Intrigued? I thought so.

In this guide, I’ll walk you through everything you need to know about buying a HUD home with $100 down. We’ll cover what types of homes HUD sells, how to find them, making an offer, getting financing, and tips for owning a HUD property. I’ll even share some of my own experience buying a HUD home!

Trust me, this can be an amazing opportunity to finally achieve your dream of homeownership, even if you don’t have much in savings. So let’s get started and see if a HUD home could be right for you!

What is a HUD Home?

First things first – what exactly is a HUD home? HUD is a cabinet department of the federal government that manages public housing, rental assistance, and other affordable housing programs. When people lose their homes to foreclosure, the mortgage lender will often sell the home to HUD. HUD also acquires properties that were seized by the government for various reasons.

The most common types of HUD homes include:

  • Foreclosed homes – After foreclosure, the lender sells the home to HUD.
  • Seized homes – Property seized due to criminal activity or tax evasion.
  • Repossessed homes – When owners default on an FHA-insured mortgage.

Other less common HUD properties can include homes conveyed for unpaid taxes and unclaimed properties.

The cool thing about HUD homes is that they are typically sold at below market value! So you can often get a great deal. However, many need repairs since they were foreclosed on. But the low price helps make up for that, as we’ll see later.

HUD $100 Down Payment Program Overview

Now onto the real reason you’re here! There’s a special HUD program that allows buyers to purchase a HUD-owned home for just $100 down.

Yep, you read that right – just $100 down, plus closing costs!

The program has a few basic requirements:

  • Must be your primary residence
  • 1-2 unit home (single family, condo, etc)
  • Meet requirements for FHA-insured financing
  • Have acceptable credit score and debt-to-income ratio

The $100 down payment program only applies to HUD homes. But it’s an amazing opportunity for lower income buyers to finally enter homeownership. Keep in mind though, HUD homes are sold “as-is”, so repairs are your responsibility. But read on to see how you can finance repairs too!

Eligibility Criteria for $100 Down Payment Program

Alright, let’s dive into the eligibility requirements for the $100 down HUD home program.

You must be purchasing the home as your primary residence. Investment properties don’t qualify.

The home must be a 1-2 unit property. This includes single family homes, condos, manufactured homes, etc.

You need an FHA loan. FHA loans allow low down payments and lower credit scores.

A valid Social Security Number is required.

You’ll need proof you have at least $100 for the down payment. This can be gift funds from family, your own savings, etc.

A minimum credit score around 580 is generally needed, but can vary by lender. The higher the better!

Your debt-to-income ratio needs to be below 43%. This includes your mortgage payment and other monthly debt payments.

Be sure to confirm all HUD requirements before making an offer!

Finding HUD Homes for Sale

Next comes the fun part – finding available HUD homes in your area! There are a few ways to go about this:

  • Browse the HUD Homestore website. I always start here to see new HUD listings. You can filter by location and the $100 down payment program.
  • Work with a HUD-approved real estate agent. They have access to listings before they hit the public HUD site.
  • Check real estate websites like Zillow and But you’ll need to verify the seller is actually HUD.
  • Drive or walk around your target neighborhoods. Sometimes HUD properties aren’t officially listed yet. Look for the HUD home sticker sign out front.
  • Search MLS listings for clues a home is HUD-owned. This info isn’t always disclosed, so look for telltale signs like the seller being a bank.

Pro tip: Often the best HUD deals get snapped up fast by investors. So check the listings frequently and be ready to move quick!

Making an Offer on a HUD Home

Found a HUD fixer-upper you just can’t resist? Awesome! Now let’s look at how to make an offer.

The process is a bit different than a regular home purchase. HUD uses an online bidding system, so you’ll need a HUD-approved real estate agent to submit your offer through the HUD Home Store website.

Here’s what goes into a HUD offer:

  • Research the property’s value and recent sales in the area so you make a competitive offer.
  • Provide your agent the case number or property ID number from the HUD listing.
  • The offer includes your proposed purchase price, financing terms, and any contingencies.
  • Submit a pre-approval letter from your lender with the offer to show you are qualified and serious.
  • Proof of the $100 down payment funds will also be required.

Once submitted, HUD reviews all offers and accepts, rejects, or counter offers. It may take some negotiating but be patient!

Negotiating with HUD

Speaking of negotiating, here are some tips for getting your best deal on a HUD home purchase:

  • Research homes in the neighborhood to estimate the fair market value. Offer just below this.
  • Get a home inspection before making an offer, so you know the true cost of repairs needed.
  • Factor in repairs and upgrades into your offer price. Sweat equity can help you build equity!
  • Make reasonable counteroffers if your first offer is rejected. But don’t lowball.
  • Be patient! HUD can take awhile to review offers, depending on their workload.

The key is understanding the home’s value and condition so you can negotiate smartly with HUD. Don’t be afraid to make a counteroffer if you have good reason.

Financing a HUD Home Purchase

In order to buy a HUD home with $100 down, you need an FHA-insured mortgage loan. Here are some things to know about FHA financing:

  • FHA loans allow down payments as low as 3.5% and have looser credit standards than conventional loans.
  • Popular terms are 30, 20, 15, and 10 year fixed rate loans. FHA also offers a 5/1 adjustable rate mortgage.
  • Interest rates are set by the market just like conventional loans. Rates are still near historic lows in 2023!
  • FHA allows gift funds for your down payment from family, non-profits, etc.
  • If repairs are needed, FHA’s 203(k) rehab loan combines purchase and renovation into one loan.
  • You can even combine the $100 HUD program with a 203(k) rehab loan!

Work with a HUD-approved lender to pre-qualify and find the best FHA loan for your scenario.

The Buying Process Step-By-Step

Now that you know the guidelines and financing options, let’s quickly walk through the full process of purchasing a HUD home with $100 down:

  1. Find a HUD property either from HUD directly or a real estate agent.
  2. Get pre-approved for an FHA loan and confirm you meet all HUD requirements.
  3. Make an offer through a HUD agent using the online bidding system.
  4. Negotiate the purchase price and terms with HUD if needed.
  5. Conduct inspections to identify any necessary repairs.
  6. Finalize loan approval by providing all required documents to your lender.
  7. Close on the home once the financing and paperwork is complete!

It can take 30-60 days to close once your offer is accepted. Then the home is finally yours!

Tips for Owning a HUD Home

You’re so close now! Here are my tips for settling into your new HUD home:

  • Budget for repairs and shop around for the best contractor prices.
  • Make upgrades like new floors and paint to increase value. Sweat equity pays off.
  • Take advantage of special programs like FHA 203(k) loans and down payment assistance for lower income buyers.
  • Prepare for more maintenance and repairs than a traditional home. But costs should be lower.
  • Hold off on selling for at least 12 months. Seasoning requirements apply to some HUD homes.

Owning a HUD home takes some work upfront. But if you have the skills or resources to renovate, you can end up with tons of equity! Not to mention the pride of homeownership.

Recap and Conclusion

The HUD $100 down payment program allows you to buy a HUD-owned home for just $100 as long as you’ll live there and use FHA financing. Despite the low down payment, there are still eligibility requirements you need to meet.

The keys are finding available properties, making a competitive offer, getting the right financing, and having the ability to make any necessary repairs. Do this right, and you could land an awesome HUD deal! It worked for me, and it can definitely work for you too.

I hope this guide gave you a good overview of how to buy a HUD home with $100 down. It’s an amazing opportunity to finally realize the dream of homeownership. HUD wants to help responsible buyers get into these properties, even with limited funds. So don’t wait – find your HUD diamond in the rough today!

Best of luck and feel free to reach out if you have any other questions!

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