Friday, October 31, 2008

What Is the Difference Between HUD and FHA? Do You Need FHA Financing to Buy a HUD Home?

Q: What is the difference between HUD and FHA? Do you need FHA financing to buy a HUD home?

A: HUD is the U.S. Department of Housing and Urban Development, and oversees a wide range of federal housing, economic development, and anti-discrimination programs. FHA is the Federal Housing Administration, and provides mortgage insurance on loans made by FHA-approved lenders. FHA is part of HUD.

When a house that has an FHA-insured mortgage goes into foreclosure, it is known as a "HUD home" because HUD, rather than a bank, takes title to the property. It is not necessary for a buyer to get FHA financing to buy a HUD home. HUD doesn't care where the money to buy the house comes from - they just want to sell it.

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