The HUD $100 Down Program in Colorado: How It Works, What It Saves, and How to Stack It

There is a version of buying a HUD home in Colorado where the down payment is $100. Not $100 plus a catch. One hundred dollars. It is real, it is an official HUD incentive, and this week several of the HUD homes listed in metro Denver carry it. It is also easy to get wrong, so here is how it actually works.

What is the HUD $100 down program?

When HUD sells one of its foreclosed homes, it can attach a sales incentive that lets an owner-occupant buyer using an FHA loan put down $100 instead of the usual 3.5%. The buyer still gets a normal FHA mortgage. HUD simply agrees to accept $100 as the down payment on that specific house.

The incentive exists because HUD wants owner-occupants in these homes, not investors, and the down payment is the wall most first-time buyers hit. Removing it moves houses.

Which HUD homes in Colorado qualify?

• Only homes HUD has flagged. The incentive is set listing by listing. On our HUD homes for sale by city tiles, homes that carry it show a small “$100 down” tag pulled straight from HUD’s data.
• Only FHA-insured homes. The listing has to be marked IN (insured) or IE (insured with escrow). An uninsured home cannot use a standard FHA loan, so the incentive does not apply. What IN, IE and UI mean.
• Only owner-occupants. You sign a certification that you will live in the home for at least 12 months. Lying on it is a federal offense.
• Only FHA financing. Cash buyers, conventional buyers and VA buyers do not use it. If you were going to use VA anyway, VA is already zero down.

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How much does it actually save?

On a $305,000 Aurora HUD home, the standard FHA down payment is $10,675. With the incentive it is $100. That is the whole difference. Your loan amount goes up by the same amount, so your monthly payment is roughly $65 higher, and you carry a little less equity on day one. For most buyers that trade is worth making, because the alternative is not buying.

What you still pay

• Closing costs. Lender fees, title, recording, prepaid taxes and insurance. Figure $6,000 to $9,000 on a metro Denver HUD home. You can ask HUD to pay up to 3% of the price toward these in your bid. It lowers HUD’s net and can cost you the bid on a fresh listing, so use it on a home that has sat. How the bidding really works.
• Earnest money. $500 on homes under $50,000, $1,000 above that, due within two business days of acceptance.
• FHA mortgage insurance. The upfront premium is financed into the loan; the monthly premium is part of your payment. Standard for any FHA loan.

How to stack it with the other programs

This is where the $100 down incentive gets interesting for Colorado buyers, because it stacks.

• Good Neighbor Next Door. Teachers, police officers, firefighters and EMTs can buy a HUD home in a revitalization area at 50% off and, if they use FHA, put $100 down. Half-price house, $100 down. Who qualifies and how the lottery works.
• CHFA down payment assistance. If the incentive does not apply to the home you want, Colorado’s CHFA program can cover most of the 3.5% for buyers under the income limits. CHFA down payment assistance explained.
• HUD closing-cost help. The 3% toward closing costs, written into the bid, works with or without the $100 down incentive.

Put those together on the right listing and a first-time buyer gets to about $1,000 cash to close. It is not every home and not every buyer, but it is real.

How to buy a $100 down HUD home in Colorado

1. Get a real FHA pre-approval first. The owner-occupant bid window on an insured home is 15 days. You cannot start a loan on day 12. Mike Oswald at Rate works HUD files and turns pre-approvals fast enough for a bid window.
2. Watch the listings for the tag. Every HUD home in Colorado, refreshed twice a day, with the $100 down tag on the ones that carry it.
3. Inspect before you bid. The home is sold as-is and the incentive does not change that. What to check first.
4. Bid through a HUD-registered agent. Only a registered broker can place the bid, and HUD pays the commission. That is us, and it costs you nothing.
5. Close on time. The contract sets the date. Late is the same as never, and the earnest money is gone. The timeline from bid to closing.

The honest catch

The $100 down incentive comes and goes. HUD turns it on when inventory is slow and off when it is not, and it varies by region. Do not plan your whole purchase around it. Plan around a real pre-approval and a home that passes inspection, then treat the incentive as the bonus it is when it shows up on the listing you want.

FAQ

Is the $100 down program available on every HUD home?

No. It is a HUD incentive that HUD turns on by region and by listing. The listing itself says whether it applies. If it does not, the standard FHA down payment of 3.5% is the floor.

Do I need FHA financing to use $100 down?

Yes. The incentive is only for FHA-insured purchases by owner-occupants. Cash, conventional and VA buyers do not use it.

Can I combine $100 down with Good Neighbor Next Door?

Yes, when both apply. A qualifying teacher, officer, firefighter or EMT can buy at 50% off through Good Neighbor Next Door and put $100 down with FHA financing.

Can investors use the $100 down incentive?

No. It is for owner-occupants only, and you certify you will live in the home for at least a year.

What else do I still have to pay?

Closing costs, prepaid taxes and insurance, and the earnest money deposit. HUD can pay up to 3% toward closing costs if you ask for it in the bid, and CHFA can help with the rest.

Where to go next

• Financing a HUD home in Colorado
• Good Neighbor Next Door: 50% off for teachers, police, fire and EMTs
• The truth about $1 HUD homes
• How to buy a HUD home
• HUD home FAQs
• What an FHA loan is and how it works in Denver

Call or text 303-955-4220. A live person answers, and if a $100 down HUD home is the wrong move for you, we will say so.

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