When to bid

HUD properties are offered on the market in phases depending on the condition of the property. There are three standards of condition. These conditions are based on FHA standards for a property to be inhabitable under a new FHA loan.

1. Insured - The property is in a good enough condition that FHA would insure a new loan on it as it sits.
2. Insured with Escrow - The property is not in a good enough condition where FHA can insure it as it sits, but with minor repairs (less than $5,000), it will be.
3. Uninsured - The property is not in a good enough condition where FHA can insure it as it sits, but with extensive repairs ($5,000-$35,000), it will be. Note: FHA typically will not insure a home at all with unpermitted conversions or repairs in excess of $35,000. On these properties you will notice posted "203K eligible - NO".

With that said, let me explain the bidding process. Prior to a property listing, an FHA approved appraiser visits the property and performs an FHA appraisal to determine the current value and condition of the property then categorizes it into one of the three condition states above.

Insured (I) and Insured with escrow (IE) properties are placed on the market in a thirty day EXCLUSIVE bid period. This bid period is exclusive to owner-occupant buyers or HUD approved non-profit organizations and government entities. During the first 10 days of this bid period, no bidder can win the property. After day 10, all bids are opened and reviewed. If there is no acceptable bid at that time, the property remains available to bid on a daily status (bids opened daily and reviewed) for 20 more days. Should the property not receive an acceptable bid during that time, then it moves to a bid period called EXTENDED. During the extended bid period, the property is on a daily status and is available to all bidders including investors.

Uninsured (UI) properties are handled a bit different. They come on the market in a Lottery phase for 7 days. During this lottery, the property is available for HUD approved non-profit organizations and government entities only. Occassionally, lottery properties will also be offered to "GOOD NEIGHBOR NEXT DOOR" (GNND) buyers as well. This ONLY occurs when the property is located in a revitalization area in an effort to place "good neighbors" (teachers and emergency response personel) in a struggling community. These buyers qualify for a 50% discount on HUD properties located in "revitalization areas". Once the 7 day lottery period ends, the property is then offered in an EXCLUSIVE bid period of just 5 days. All bids are considered after the fifth day. If there is not an acceptable bid at that point, the property moves to the EXTENDED bid period and is open to all bidders including investors on a daily status.

All owner-occupant and investor bidders must bid through a HUD-registered Realtor. If you are not already working with a Realtor, the West GA HUD Team would love to help. : )