A HUD loan is a type of government-backed mortgage used to purchase or refinance a property. The U.S. Department of Housing and Urban Development (HUD) administers mortgage insurance programs that help low- and moderate-income families become homeowners by lowering some of the initial costs of their mortgage loans. The Federal Housing Administration (FHA), which is part of HUD, insures the loan, so your lender can offer you a better deal. HUD loans are backed by the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD).

Here are some key features of HUD loans:

• Low down-payment requirements: HUD loans offer low down-payment requirements, making it easier for borrowers to qualify for a loan.

• Relaxed credit score requirements: HUD loans have relaxed credit score requirements, making it easier for borrowers with below-average credit scores to qualify for a loan.

• Government-backed: HUD loans are backed by the federal government, which means that the government guarantees the loan and pays the lender in case of default.

• Primary residence: HUD loans can only be used to finance a primary residence.

• Insurance: FHA insurance protects lenders against loan default on mortgages for properties, including manufactured homes, some health-related facilities, and single-family dwellings and condominiums insured under standard HUD home mortgage insurance programs.

To apply for a HUD loan, borrowers need to submit a loan application to HUD, which includes providing documentation such as a transmittal letter and an Application for.