You Can Buy a Home With $100 Down. Here Is How the HUD Program Works.
All ArticlesOn eligible HUD-owned homes, FHA down payment can drop from 3.5% to $100. You still have to qualify for FHA. Homes sell as-is through hudhomestore.gov. Owner-occupants get the first bidding window.
When someone buys with an FHA loan and cannot make the payments, the lender forecloses. Because FHA insured that loan, HUD steps in, pays the claim, and takes the property. Then HUD sells it.
HUD lists those homes on hudhomestore.gov. They are public, priced to move, and available to regular buyers who plan to live there. On certain eligible properties, HUD drops the required down payment from the standard FHA 3.5% to $100. That is not a typo. One hundred dollars. The program has been around for years. Most buyers have never heard of it.
What makes a HUD home different
These are former FHA foreclosures. HUD is not a real estate investor maximizing profit. Homes are often priced below comparable listings. The goal is owner-occupants back in the house and the asset off HUD's books.
The catch: HUD sells as-is. They will not fix anything before closing. Inspection and a clear-eyed look at condition are the whole game.
How the $100 down works
On eligible HUD-owned properties, HUD reduces the required FHA down payment from 3.5% to $100. You still get a regular FHA loan — same rates, same mortgage insurance, same 30-year term. Only the down payment changes.
On a $200,000 home, standard FHA down is $7,000. With $100 down you finance the rest. Loan amount is $199,900 instead of $193,000. Payment is slightly higher. Cash at closing drops a lot. The $100 incentive has to be in the executed contract. Your lender and agent have to know how to structure it.
Who qualifies
You still have to qualify for FHA. The $100 program does not change income, employment, or credit rules. It only changes the down payment.
- Credit: 580 minimum. Between 500 and 579, FHA normally wants 10% down — and $100 Down would not apply.
- Income and employment: stable income and a two-year history. W-2s, pay stubs, sometimes tax returns.
- Debt-to-income: generally under 43% to 50% of gross monthly income depending on the rest of the file.
- Primary residence. Investors are not eligible for the $100 incentive.
- No HUD home purchase in the previous 24 months.
The bidding process
There is no back-and-forth negotiation. You submit a sealed bid through a HUD-registered agent. HUD accepts it or does not.
When a property first hits, there is an exclusive bidding period of up to 30 days for owner-occupants, nonprofits, and government agencies. Investors cannot bid in that window. That is a real advantage. If no acceptable offer comes in, HUD opens it to everyone including investors. Move in the exclusive window if you can.
Not every agent is HUD-registered. Ask specifically.
Property condition is what trips people up
Insured: meets FHA minimum property standards. Standard FHA, including $100 Down, can work.
Insured with escrow: minor issues to fix after closing. HUD can set aside up to $10,000 in escrow. FHA and $100 Down can still work.
Uninsured: condition problems block a standard FHA loan. You can still buy with cash, conventional, or an FHA 203(k) that rolls purchase and repairs into one mortgage. More paperwork, longer process, and it can make a below-market house work.
What you still pay
The $100 covers the down payment. It does not cover closing costs. FHA closing costs typically run 2% to 4% of the loan. On $200,000 that is $4,000 to $8,000. Prepaids — insurance, taxes, prepaid interest — can add $1,500 to $3,000.
On many HUD listings, HUD allows a selling allowance of up to 3% of price toward closing costs. You have to request it in the offer. If the listing includes it and you structure the offer correctly, cash at closing can still be very low. Run the full cash-to-close before you bid.
Finding HUD homes in Tennessee
All of them are on hudhomestore.gov. Search by state, city, or ZIP. Inventory changes. Look at the condition classification and whether $100 Down is noted. Some houses are move-in ready. Some need work.
Order of operations: FHA pre-approval first. HUD-registered agent who has done these. Tour and inspect before you bid. Submit during the owner-occupant window if it is newly listed. HUD typically gives 30 to 60 days to close once the contract is accepted.
I am FHA-approved and have worked HUD purchases. If you want to know whether a specific property or your file would work, call or text (615) 955-0461. THDA and The Housing Fund are the other two in this series. The right program depends on credit, income, whether you are buying a HUD home or a regular listing, and how much help you need.
Next: If You Teach, Fight Fires, Work in Law Enforcement, or Are an EMT, You Can Buy a Home at 50% Off List Price., Tennessee Has Money to Help You Buy a Home. Most People Don't Know It Exists., and There Is Another Down Payment Program in Tennessee. It Goes Up to $35,000.. Or take the Free Home Affordability Check.
Sources and what to verify
This is general mortgage education, not a commitment to lend. Rates, programs, and eligibility depend on the borrower, the property, and investor guidelines. Confirm tax, school, zoning, and legal facts with the official source.
Questions about your specific situation? Call or text Keith directly. No call centers, no runaround.
Book a 15-min ZoomFrequently Asked Questions
Keith Goeringer is a Loan Originator at Barrett Financial Group, NMLS #488023, serving buyers in Franklin, Williamson County, and Middle Tennessee. Call or text (615) 955-0461 or email keith@keithgo.com.
A property HUD owns after an FHA foreclosure. HUD sells it as-is on hudhomestore.gov, often below neighborhood comps, to get an owner-occupant back in the house.
No. Only eligible listings, and it has to be written into the contract. Confirm on the HUD HomeStore listing and with an FHA lender who has done these.
580 for FHA and for $100 Down. Scores 500–579 typically need 10% down on FHA, and $100 Down would not apply.
Yes. Plan 2% to 4% plus prepaids. Some HUD listings allow a selling allowance up to 3% toward closing costs if you request it in the offer.
Yes. There is no first-time buyer rule. You cannot have purchased a HUD home in the previous 24 months, and it has to be your primary residence.
Insured and insured-with-escrow can still use FHA. Uninsured often needs cash, conventional, or a 203(k) that finances the repairs. Always inspect. HUD will not fix it for you.
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