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Q: I’ve saved a little money, and I have good credit—but the homes in my area are really expensive. Someone at work told me to look into buying a “HUD home”, because they’re cheaper. What is a HUD home? And how do I find one?

A: It sounds like you’ve done some of the preparation you need to do to become a homeowner. Youve made excellent progress already.

Searching for a more affordable home is always smart when starting out. A “HUD home” is owned by the U.S. Department of Housing and Urban Development, because the previous owner defaulted on a loan—and the home went through the foreclosure process.

While HUD homes are not available in every market, the ones that are for sale usually fetch below market prices. You can search for available properties at this official site from the department .

Keep in mind, youll need to work with an agent registered to bid on HUD homes.

HUD offers special incentives to buyers in different markets, so you may be able to take advantage of offers—including low down payments or sales allowances you can use to pay closing costs, make repairs or make a larger down payment.

You can finance a HUD home with FHA, conventional or VA financing. In addition, if youre a teacher, police officer, firefighter or EMS personnel, you may qualify to buy a HUD property located in a revitalization area at a 50% discount—as long as you live in it for at least 36 months.

HUD homes have a field service manager who is responsible for inspecting the home, making sure it’s secure, making cosmetic enhancements or repairs, and providing maintenance while it is unoccupied.

HUD homes are sold as-is with no warranty for future repairs. You should have a home inspection when your contract is accepted—and once more just prior to the closing so you can notify HUD if any additional damage to the property occurred while it was under contract.

Once you’ve closed on the property, all repairs and maintenance are your responsibility.

If you purchase a HUD home that needs repair, you may want to look into financing it with an FHA 203k loan. a program that allows you to wrap your renovation costs into your loan.

If this sounds intriguing and youd like to follow up on purchasing a HUD home, contact a mortgage lender. Try to find a lender that works with first-time home buyers. They can walk you through your options for financing a home and talk to you about what you might be able to afford.

In addition, you can investigate homeownership programs in your area by checking on Down Payment Resource to see if you qualify for assistance with a down payment loan. The programs also typically require home-buyer education, which I always suggest for first-time buyers.

For more information about buying a HUD home, visit this official government site .

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Send your real estate questions to Michele at advice@realtor.com. and she may answer them in upcoming columns.

Michele Lerner, author of HOMEBUYING: Tough Times, First Time, Any Time, has been writing about real estate and personal finance since 1990. Her work has appeared in The Washington Post, MSN Real Estate, Fox Business, The Motley Fool, Bankrate, HSH.com, The Washington Times and Daily Finance.