How Long do HUD Homes Take to Close?

HUD Homes Buying Process

The short answer: It depends. Home loans take varying amounts of time to close, depending on where you are, what you are buying, and what complications there are. Your choice of lender is also a factor, since a HUD home is funded by a commercial lender and not the government. We'll look at these factors and deliver a general timeline for most HUD home loans.

A HUD home loan buying and closing process differs from a conventional loan process from a commercial lender. Buying a home from a bank, for example, is pretty straightforward. After getting pre-approved, finding a property and signing a sales contract, you take the contract to the bank and it supplies you with the documentation you need (inspections, appraisal, insurance, etc.). Following this, within a certain time period, the bank approves the loan and you go to close.

A HUD home loan must be approved by the government, and this usually involves a government-sponsored appraisal and separate approval process. The requirements vary, so it helps to have a good real estate agent or broker who understands how to process HUD home loans.

Generally speaking, HUD takes a good bit of time to process a FHA home loan application (similar to the Department of Veteran Affairs with VA loans). Typically, you can expect HUD to take approximately 30 days to process your loan, sometimes less depending on their backlog. If the property is in relatively good condition, and few repairs are needed, then you could move to close on the property within 45 days after they sign the contract.

If your home needs repairs, though, it could be 60 days after they sign the contract. So, for a FHA loan (the most common type), you could be looking at anywhere from 60 days to 90 days to close, depending on the condition of the home and other factors involved.