The list price on a HUD home is not a guess. HUD ordered an FHA appraisal before it listed the house, and the price is that appraisal, or a reduction from it after time on market. That appraisal follows the house, and for FHA buyers it is the one their lender uses.
FHA buyers: the appraisal on file
- HUD assigns an FHA case number to the home when it is appraised. Your lender requests a transfer of that case number and receives HUD’s appraisal.
- The appraisal is good for 120 days from its effective date, with a possible extension if the contract was signed while it was valid. If it has expired, your lender orders a new one.
- Because the appraisal already exists, an FHA buyer who bids at or below list price rarely has an appraisal problem. The value is already the list price.
- The utility activation is still required if the appraisal was “subject to” systems being tested, or if the lender orders a new one.
VA and conventional buyers
You order your own appraisal. It can come in higher or lower than HUD’s. Plan on utility activation and 10 to 14 days. Activation details.
When you bid above list
On competitive homes buyers bid over list. HUD’s appraisal does not move. An FHA loan is capped at the appraised value, so every dollar above it is cash from you. A bid of $10,000 over on a $350,000 home means $10,000 extra at closing, plus your down payment on the $350,000. Know that before you bid.
When the appraisal comes in low
- HUD does not renegotiate price because of your appraisal. The contract price stands.
- You can bring the difference in cash.
- If you cannot, ask your lender for a written denial based on value. For an owner-occupant, a documented financing denial is a full earnest money refund. Refund rules.
- If HUD later reduces the price, you can bid again at the new price.
Repairs the appraiser calls out
On an IE home, HUD has already set a repair escrow amount for the items FHA needs done. Those get done after closing with escrowed money. On an IN home there should be none. If a VA or conventional appraiser calls out a new item, HUD still will not fix it; your lender may allow you to fix it before closing with HUD’s written permission, or escrow it.
A plain-English example
An FHA buyer bid $402,000 on a Thornton home listed at $395,000, net to HUD $390,000 after HUD paid 3% closing costs. The lender used HUD’s appraisal at $395,000. The buyer brought the $7,000 over-list amount plus 3.5% of $395,000 to closing. No new appraisal, no utility activation for value, and the loan closed on day 33.
Not sure which rule applies to the house you are looking at? Call or text 303-955-4220. A live person answers, and the answer is free.
Written and reviewed by
Brian Lee Burke, Colorado HUD home specialist and team leader
Licensed Colorado real estate professional since 2002 · REALTOR® · Team leader and licensed broker of the Kenna Real Estate Group at Keller Williams DTC, a HUD-registered group that regularly bids on HUD homes · Author of The Real Estate Playbook and Mastering Real Estate. Brian’s full HUD biography.
Last reviewed: September 14, 2026 · Sources: HUD Home Store (hudhomestore.gov) and HUD program guidance, HUD Handbook 4000.1, REcolorado MLS data via kennarealestate.com, and the Kenna Real Estate Group’s own HUD transaction files.
Contact: call or text 303-955-4220 or homes@kennarealestate.com. During office hours you reach a live local Kenna real estate professional, not a robot or a national call center. Brokerage: Kenna Real Estate Group at Keller Williams Realty DTC, LLC, 6300 S Syracuse Way, Suite 150, Centennial, CO 80111. Each Keller Williams office is independently owned and operated. The Kenna Real Estate Group is an independent real estate team and is not affiliated with or endorsed by HUD or any government agency; official property information comes from HUD Home Store. Equal Housing Opportunity.
Free guide, PDF
$100 Down: The HUD Home Financing Guide
The $100 down rule, CHFA, HUD paying your closing costs: the stack that gets a buyer in for about $1,000. 14 pages, free.
Why you want it before you bid:
- Which listings qualify for $100 down and how to spot them (the IN and IE codes)
- What you still pay at closing, line by line, with a real example
- How $100 down stacks with CHFA, metroDPA and Good Neighbor Next Door
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