What does HUD stand for and what does it do?

The U.S. Department of Housing and Urban Development is a federal agency that helps buyers, renters, and communities find safe and affordable housing. Learn more about HUD’s purpose and how its major programs – from FHA loans to Section 8 vouchers – can help you find an affordable and safe place to live.

What is the Department of Housing and Urban Development (HUD)?

HUD stands for the Department of Housing and Urban Development, which was established in 1965 to improve the nation's housing market, address urban poverty, and expand affordable housing opportunities. Its mission is to build inclusive, resilient communities and ensure that everyone has equal access to quality housing.

HUD primarily focuses on helping low- to moderate-income families, older adults in need of senior housing, people with disabilities, and aspiring home buyers who might struggle to secure conventional financing.

The agency is led by the secretary of Housing and Urban Development. This cabinet-level position is appointed directly by the president of the United States and must be confirmed by the Senate. The current HUD secretary is Scott Turner.

What are HUD’s key functions?

HUD's mission is to "create strong, sustainable, inclusive communities and quality affordable homes for all.” The agency focuses its daily efforts on several key functions:

• Promoting affordable housing. HUD creates and funds programs that help lower-income renters and buyers afford a comfortable place to live.
• Enforcing fair housing laws. The agency investigates housing discrimination to ensure equal opportunity for home buyers and renters.
• Making homeownership more accessible and affordable. With mortgage insurance and buyer assistance programs, HUD helps people buy homes even if they do not have perfect credit or large savings.
• Strengthening communities. HUD provides grants to local governments to help rebuild struggling neighborhoods, support economic growth, and improve infrastructure.
• Ensuring safe and sustainable housing. HUD sets strict building and safety standards, particularly for manufactured homes and federally subsidized properties.

What are some major HUD programs and initiatives?

Here are some of the most prominent HUD programs and initiatives. You can use this tool to search a full list of HUD programs.

Fair Housing Act

HUD is responsible for enforcing the Fair Housing Act. Passed in 1968, the Fair Housing Act works to ensure equal opportunity housing and prohibits housing discrimination based on:

• Race
• Color
• National origin
• Religion
• Sex
• Familial status
• Disability

The Fair Housing Act enables HUD to investigate complaints of housing discrimination.

Federal Housing Administration

The Federal Housing Administration (FHA) is an agency within HUD that insures government-backed loans. As a result, lenders are more willing to offer mortgages to home buyers with lower credit scores and limited savings. With FHA backing, you may qualify to buy a home with a down payment as low as 3.5%.

Government National Mortgage Association (Ginnie Mae)

The Government National Mortgage Association, commonly known as Ginnie Mae, plays an important role in serving HUD's affordable housing mission. Ginnie Mae helps ensure that mortgage lenders consistently have sufficient funds to make loans.

Ginnie Mae doesn’t buy or sell individual loans. Instead, it guarantees investors of government-backed mortgage-backed securities that they will receive timely payments. By attracting global investors to the U.S. housing market, Ginnie Mae encourages lower interest rates and makes government-backed loans more widely accessible.

Community Development Block Grant

The Community Development Block Grant (CDBG) program provides annual grants to cities, states, and counties to support local community development. The grant money goes directly toward developing safe housing and providing economic opportunities for low- to moderate-income residents.

Local governments use CDBG funds to upgrade public infrastructure, such as water and sewer systems; create vibrant community centers; fund public services; and rehabilitate distressed properties.

HUD housing

HUD allows home buyers to purchase HUD homes, which are foreclosed homes that were originally purchased with an FHA loan. Because the agency insured the original loan, HUD reclaims the properties after their mortgages default and eventually go into foreclosure. The agency then sells the homes to recover its financial loss from the foreclosure.

HUD homes are sold at highly competitive prices and may include perks such as prepaid closing costs. These properties are an attractive, affordable option for lower-income buyers willing to purchase a home in as-is condition.

Housing Choice Voucher Program (Section 8)

Another HUD initiative is the Housing Choice Voucher program. Authorized under the 1937 Housing Act, the program provides safe and sanitary housing to qualified lower-income households, older adults, and people with disabilities by issuing monthly Section 8 vouchers. Vouchers remain available as long as the household remains eligible and the public housing agency (PHA) has funding.

To qualify, your household income typically cannot exceed 50% of the median income for your specific county or metropolitan area. Once approved, you aren't limited to living in subsidized housing projects. You can use your voucher to rent single-family homes, townhouses, and apartments in the private market, provided your landlord agrees to accept the voucher, and the property meets HUD's basic health and safety standards.

Other HUD buyer incentive programs

From down payment help to homeownership courses, HUD offers other incentives and assistance for home buyers.

Good Neighbor Next Door

The Good Neighbor Next Door program provides full-time public servants with the opportunity to purchase a home in a designated revitalization area at 50% off the purchase price. Eligible professionals include police officers, firefighters, emergency medical technicians (EMTs), and teachers.

To participate in this program, home buyers must commit to living in the house as their sole primary residence for at least 3 years. HUD requires that you sign a second mortgage and note for the discount amount, but it acts as a "silent second" mortgage. This means no interest or payments are required on the second mortgage as long as you fulfill your 3-year occupancy commitment.

Dollar Homes

The One Dollar program enables local governments to buy HUD-qualified single-family homes for just $1, repair them, and then sell them to low- to moderate-income families at affordable prices. Eligible properties are those that have already been on the market for more than 6 months without selling. By transferring these fixer-upper homes to local municipalities, HUD turns vacant houses into opportunities for families in need of affordable housing.

HUD $100 down payment program

If you are buying a HUD-owned home using an FHA loan, you might be eligible for the HUD $100 down payment program. Normally, an FHA loan requires a 3.5% down payment. However, under this special initiative, eligible buyers purchasing a HUD real estate-owned property as their primary residence need only put down $100.

This program works with standard FHA loans and with FHA 203(k) renovation loans, which provide additional funds for necessary repairs. Financing both your home and your repairs into a single mortgage provides down payment assistance.

FAQ

Here are answers to some frequently asked questions about HUD.

What is the income limit for HUD housing?

Income limits for HUD housing programs depend on the program you are applying for, the size of your family, and the location where you want to live. HUD bases its income limits on the area median income (AMI) for a specific metropolitan area or county. Limits are typically categorized into low income (80% of the median), very low income (50% of the median), and extremely low income (30% of the median). You can check HUD housing income limits in your area using this tool.

How do I apply for HUD assistance?

The application process will depend largely on the type of help you’re seeking. If you're looking into buying a house with a low income, your best first step is to connect with a HUD-approved housing counseling agency or a trusted lender to discuss FHA loan programs. If you are a renter seeking a Section 8 voucher or public housing assistance, you will need to apply directly through your local PHA.

Does HUD help with home repairs?

Yes, HUD assists homeowners with necessary repair costs, especially for safety reasons or following a disaster. While it doesn't issue cash directly, HUD backs FHA Title I and 203(k) loans, which allow you to finance renovations into your mortgage. HUD also provides funding to local governments through block grants that offer home improvement grants to eligible residents for safety hazards or essential upgrades

Does HUD offer loans directly to borrowers?

No, HUD does not lend money directly to home buyers. Instead, it works with a network of approved private lenders to insure or guarantee loans. For instance, you get FHA loans from standard lenders, and HUD insures them to protect the lender if you default. Similarly, HUD guarantees home loans for Native American families through the Section 184 program, using private lenders rather than direct government lending.

How can I find and buy a HUD home?

If you’re interested in buying a foreclosed home, you can find current listings of HUD homes directly on the HUD Homestore website. You’ll need to work with a real estate agent or broker who is actively registered with HUD to submit a bid on your behalf.

The bottom line: HUD offers several programs that help buyers and renters

The Department of Housing and Urban Development works to ensure safe and affordable housing for all Americans. From accessible FHA loans and Section 8 vouchers to innovative neighborhood revitalization grants, the agency’s initiatives are designed to bridge the gap between your housing needs and your budget.

Are you interested in purchasing a HUD home? If so, start your mortgage application online today with Rocket Mortgage and take the first step toward your home buying process.

Rocket Mortgage is not acting on behalf of FHA or HUD