The HUD $100 down program lets an owner-occupant buyer purchase a HUD-owned foreclosed home with just $100 as the entire down payment, instead of the 3.5% an FHA loan normally requires. It applies only to properties HUD acquired through defaulted FHA mortgages and listed for sale on the HUD Home Store, and only when you finance the purchase with a new FHA-insured loan and agree to live in the home yourself. On a $150,000 house, the incentive saves more than $5,000 in cash at the closing table.
Which Homes Are Eligible
Only HUD Real Estate Owned properties qualify. These are homes where the prior owner defaulted on an FHA-insured mortgage, foreclosure ran its course, and the property was conveyed to HUD. The department then lists them at hudhomestore.com. No other property type is eligible, regardless of price, condition, or location.
Each HUD listing carries a condition designation that governs financing. The $100 down option is only available on the first two:
- Insured. The home already meets FHA’s minimum property requirements and can be financed with a standard FHA loan.
- Insured with escrow. The home needs minor repairs of no more than $5,000 to meet FHA standards. FHA financing is still available, and part of the loan funds go into an escrow account to pay for those repairs after closing. The mortgage can include up to 110% of the estimated repair cost.1HUD. HUD REO Sales Guide Appendix A
- Uninsured. The home needs more than $5,000 in repairs and doesn’t meet FHA standards as-is. The $100 down option is not available on these properties.
Every HUD home is sold in as-is condition with no warranty. HUD will not make repairs before closing or guarantee anything about the property’s condition.2eCFR. 24 CFR Part 291 – Disposition of HUD-Acquired Single Family Properties The listing itself must indicate that the $100 down promotion applies to that property and geographic area. Not every eligible HUD home carries it, so confirm on the individual listing before you plan around the $100 figure.
Who Qualifies as a Buyer
The program layers a few program-specific rules on top of ordinary FHA borrower requirements.
On the FHA side, you need a minimum credit score of 580 to qualify for maximum financing, though individual lenders may set the bar higher. A score between 500 and 579 requires 10% down, which cancels the benefit of the program entirely. Lenders will review two years of employment history along with tax returns and recent pay stubs. Total debt-to-income generally cannot exceed 43%, and the housing payment alone should stay at or below 31% of gross monthly income. Student loans in deferment or forbearance still count: if no payment shows on your credit report, the lender assumes 0.5% of the outstanding balance as a monthly obligation.3National Association of REALTORS®. FHA Loan Requirements
On the program side, you must sign HUD’s owner-occupant certification pledging to live in the home as your primary residence for at least 12 months.4Department of Housing and Urban Development (HUD). Certification for Individual Owner-Occupant Buyers Investors cannot use the program. You also cannot have purchased another HUD home within the previous 24 months.
What the $100 Actually Covers
The $100 replaces the down payment. It does not replace closing costs, and it does not remove mortgage insurance.
Buyers are still responsible for the usual closing costs on an FHA loan:
- Loan origination fee charged by the lender.
- Appraisal and credit report fees required for every FHA transaction.
- Title insurance, both the owner’s and the lender’s policies.
- Recording fees charged by the county to record the new deed.
- Prepaid interest covering the gap between closing and the first payment cycle.
- Escrow deposits for property taxes and homeowner’s insurance.
- The upfront mortgage insurance premium, 1.75% of the loan amount, which most buyers finance into the loan rather than pay in cash.5HUD. Appendix 1.0 – Mortgage Insurance Premiums
On a $150,000 HUD home, total closing costs typically run between $5,000 and $10,000 depending on location, lender, and local taxes. HUD does allow seller concessions on some transactions, so ask your broker whether the listing includes a closing-cost credit.
Mortgage insurance is a larger long-term factor than most $100 down buyers realize. Because the loan starts with virtually no equity, the annual FHA premium of 0.85% of the loan balance stays for the life of the loan. On a $150,000 balance, that’s about $106 per month added to the mortgage bill. Eliminating it requires refinancing into a conventional mortgage after building enough equity.5HUD. Appendix 1.0 – Mortgage Insurance Premiums
How Bidding and Closing Work
You Bid Through a HUD-Registered Broker
You cannot submit a bid yourself. Every offer must come through a real estate broker who holds an active HUD registration and a Name and Address Identification Number (NAID). The broker accesses the bidding portal, submits your offer electronically, and manages the contract paperwork. If your current agent is not HUD-registered, they can complete HUD’s broker application and certification before representing you.6U.S. Department of Housing and Urban Development (HUD). How To Sell HUD Homes
The Owner-Occupant Head Start
New HUD listings run an exclusive bidding period open only to owner-occupant buyers, nonprofits, and government entities. For insured and insured-with-escrow properties, that window lasts 15 days. For uninsured properties, it’s five days. After the exclusive period, investors can bid too.7HUD. Updates to Claims Without Conveyance of Title Owner-occupants using the $100 down program compete against a smaller pool during that head start.
Submitting the Offer
Your broker files the bid electronically on the HUD Home Store during the active window. The core document is the Sales Contract, Form HUD-9548, listing your name, the property’s HUD case number, and your purchase price.8Department of Housing and Urban Development. Form HUD-9548 You’ll also provide an earnest money deposit and a pre-approval letter from an FHA-approved lender. Your lender uses the same HUD case number and purchase price to keep the mortgage file aligned with HUD’s records.
Deadlines After Acceptance
If HUD accepts your bid, your broker gets an email and the clock starts on several deadlines HUD enforces strictly. You have two business days after acceptance to deliver the original signed sales contract and required addenda to HUD’s asset management company. Missing that step can end the deal before it starts.
You then arrange a professional home inspection at your own expense. This matters because every HUD home is sold as-is, and whatever the inspection reveals becomes your problem after closing.
Closing timelines depend on financing. A standard FHA 203(b) loan or conventional financing gives you 45 days from contract execution. A 203(k) rehabilitation loan gives you 60 days. Cash purchases close in 30. Missing the deadline can forfeit your earnest money and cancel the sale.2eCFR. 24 CFR Part 291 – Disposition of HUD-Acquired Single Family Properties
The Repair Escrow Version
An “insured with escrow” listing sits between move-in ready and major fixer-upper. The home needs work to meet FHA’s minimum property requirements, but the estimated cost is $5,000 or less. You still use the $100 down program and standard FHA financing. The lender holds a portion of the loan proceeds in an escrow account and releases those funds after closing to pay for the repairs.1HUD. HUD REO Sales Guide Appendix A
The mortgage can include up to 110% of the estimated repair cost, giving a cushion for surprises. Typical issues in this bucket are peeling paint, missing handrails, broken fixtures, or minor plumbing. The FHA appraiser identifies the deficiencies, and the escrow funds aren’t released until a follow-up inspection confirms the work meets standard.
If the Home Is Listed as Uninsured
The $100 down option is off the table for uninsured properties, but the FHA 203(k) rehabilitation mortgage rolls the purchase price and full repair cost into a single FHA-insured loan and is explicitly available for HUD REO properties.9HUD. 203(k) Rehabilitation Mortgage Insurance Program The down payment is 3.5% rather than $100, the rehab work is subject to FHA plan review and progress inspections, and the closing window extends to 60 days to accommodate scoping the renovation before the loan closes. For homes that need structural work, this is often the only realistic path.
The Occupancy Pledge Is Enforceable
The 12-month owner-occupancy commitment is the price of the $100 down payment, and HUD investigates violations. Signing the certification and then renting the property out or never moving in is federal fraud. Under 18 U.S.C. § 1014, making a false statement to influence the FHA carries penalties of up to $1,000,000 in fines, up to 30 years in prison, or both.10Office of the Law Revision Counsel. 18 USC 1014 – Loan and Credit Applications Generally In practice, most cases end in loan acceleration, loss of the property, and civil penalties rather than the maximum criminal sentence, but enforcement is not rare.4Department of Housing and Urban Development (HUD). Certification for Individual Owner-Occupant Buyers
A Separate Program for Certain Public Employees
If you’re a law enforcement officer, a pre-K through 12th grade teacher, a firefighter, or an EMT, HUD’s Good Neighbor Next Door program is a separate track worth checking. It offers a 50% discount off the list price of eligible HUD homes in designated revitalization areas in exchange for a 36-month occupancy commitment rather than 12. The inventory does not overlap with the $100 down promotion, but both are aimed at moving foreclosed properties to buyers who will actually live in them.11U.S. Department of Housing and Urban Development (HUD). HUD Good Neighbor Next Door Program