How to buy a HUD home in Denver

How do you bid on a HUD home in Colorado?

This is the question we get asked most, so here it is step by step, in the order it happens. Buying a HUD home in Colorado is not like making an offer on a regular listing: there is no back-and-forth negotiation, just a sealed bid on a schedule, then a fixed set of deadlines.

1. Step 1: Get pre-approved, or line up proof of funds. HUD wants a lender pre-approval letter with the bid. Cash buyers attach a bank or brokerage statement dated within 30 days that shows the full price plus closing costs. No letter, no bid. Mike Oswald at Rate writes HUD-ready FHA and 203(k) letters in a day.
2. Step 2: Pick the home and read the listing code. Every HUD listing carries a financing code. IN and IE homes qualify for a standard FHA loan (IE means minor repairs go into escrow). UI homes need a 203(k), a conventional loan or cash. The listing also shows the bid open date and whether the home is in its owner-occupant window.
3. Step 3: Inspect before you bid. HUD sells as-is and does not fix anything. Your agent can have the utilities turned on for an inspection before the bid goes in. Bring an inspector, price the repairs and bid with that number in hand.
4. Step 4: Bid through a HUD-registered agent. Only a broker with a HUD NAID number can enter a bid on HUDHomeStore. That is us, and there is no fee to you for it. HUD pays the buyer-broker commission from the sale price.
5. Step 5: Bid in the right window. Insured homes open with a 15-day exclusive period for owner-occupants, nonprofits and government agencies. Uninsured homes get 5 days. Bids placed in the first 10 days are opened together on day 11; after that HUD opens bids every business day. Investors can bid only after the exclusive period ends.
6. Step 6: Decide your number the way HUD does. HUD ranks bids by its net after the closing-cost help you request (up to 3%) and the commission. Asking for closing costs lowers your effective bid. We run the math both ways before you commit.
7. Step 7: Wait for the bid open. HUD reviews bids the next business day after the period closes and emails the result to your agent. A rejected bid can be resubmitted the next day while the home is still listed.
8. Step 8: Deliver the contract package within 2 business days. Once HUD accepts, your agent sends the signed HUD-9548 contract, addenda, pre-approval and earnest money to the asset manager. Earnest money is fixed by price: $500 on homes under $50,000, $1,000 on everything above. Miss the 2-day deadline and HUD moves to the next bidder.
9. Step 9: Finish the loan and the 15-day inspection period. HUD signs the contract and the clock starts. Financed buyers get 15 days with utilities on for lender inspections and the appraisal. Cancel inside that window for a documented reason and the earnest money comes back; cancel later and HUD keeps it.
10. Step 10: Close on HUD’s schedule. Cash closes in 30 days, financed purchases in 45, counted from the day HUD signs. Need more time? Extensions come in 15-day blocks and cost $375 to $750 depending on price, paid up front. The title company HUD names handles the closing.

From the day a listing appears to keys in hand, plan on six to ten weeks. The dates on the official listing and in your contract control.

Want us to walk you through it on a real listing? Call or text 303-955-4220. A live person answers.

Where to go next

• HUD homes for sale by city, with what is available right now
• Find a HUD-registered agent (and how buyer-broker compensation works)
• Financing a HUD home: IN, IE, UI and which loan fits
• Get pre-approved with Mike Oswald at Rate
• How the bidding really works
• As-is inspection tips
• Good Neighbor Next Door: 50% off for teachers, police, fire and EMTs
• HUD home FAQs
• Search HUD listings on kennarealestate.com
• What an FHA loan is