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Has it always been your dream to own a home? If so, why not convert that fantasy into a reality?

Even though that may seem easier said than done, there are programs out there to help you become a homeowner, even if you fall into the low-income category. To help you see one such opportunity that’s out there, we’ll take a closer look at what it takes to buy an affordable HUD home so you can stop renting and start owning.

How HUD Homes Differ From Other Houses

Before we discuss what a HUD home is, let’s decode those three letters, so you know what we’re talking about. “HUD” stands for the Department of Housing and Urban Development, which is a government agency that lends a helping hand to low-income families.

What is the HUD most known for? Its Section 8 program that pays part of your rent to make housing a lot more accessible and affordable.

Could Section 8 rental assistance be the answer to your housing needs? If you want to make rent more affordable, yes. But if you want to own a house and become your own landlord, a HUD home is what you should focus on.

What makes a HUD home so special? Its price and the costs associated with purchasing one.

For starters, HUD homes are usually listed below the market price for other houses in the area for one reason: To attract buyers quickly. Why does the HUD need buyers fast? Because they acquired those homes when FHA loan borrowers defaulted on their loans. And since the HUD paid off the loan balance, they need that money back as quickly as possible, which is where buyers seeking a steal can save the day.

As if low prices weren’t enough to attract buyers, HUD homes can also feature lower down payments than usual and lower closing costs. Combine all of those potential savings, and you can see how a HUD home could make it a lot cheaper to become a homeowner.

Is there a catch when it comes to HUD homes’ affordability? You could say that, as they are sold “as-is.” In short, you may need to fix them up, as the HUD will not do it for you.

Purchasing a HUD Home

If the thought of saving money when buying a house entices you, here’s what it takes to purchase a HUD home:

1. Look for houses through the HUDHomeStore.
2. Hire a real estate agent that’s approved by the HUD. They’ll be necessary when it comes to viewing and bidding on the home.
3. Get a home inspection. This will let you know if any major repairs are needed before moving in. This is a crucial step since HUD homes are sold as-is.
4. After winning the home auction, find financing through normal channels like VA loans, Freddie Mac, Fannie Mae, etc. An FHA loan can help if you have a low credit score and lack a significant down payment.