Policy & Property

Real estate and mortgages

The Government Is Selling a House for $4,000: The 6 Cheapest HUD and Fannie Mae Homes Right Now

By Santosh Singh · Published · Last updated

Thumbnail for the video on the cheapest government-owned homes, headline about a $4,000 house

The federal government ends up owning homes when federally backed mortgages default, and it resells them to the public. Most are not cheap: the median list price across all 2,476 listings was $210,000. But the bottom of the market goes far lower than most people expect. Below are the six cheapest real homes on the list, the catch on each, two little-used programs, and honest all-in math.

Prices are list prices as of November 2, 2026. Homes sell and prices change daily, so verify every listing on HUD HomeStore or Fannie Mae HomePath. We do not reproduce listing photos, which are copyrighted.

Where the cheap homes are

The states with the most government-owned homes under $100,000 were Texas (36), Illinois (33), Louisiana (23), Alabama (21) and Michigan (21). They cluster in parts of the Rust Belt and the rural South, where a foreclosed home can be worth less than the cost of demolishing it.

The six cheapest homes

  1. 20899 Highway 14 E, Louisville, Mississippi (Fannie Mae): 3 bed, 1,148 sq ft, built 1960, $17,500 (about $15 a square foot).
  2. 41 W 13th St, Jamestown, New York (Fannie Mae): 3 bed, 1 bath, 1,412 sq ft, built 1900, $17,000, cut 32 percent from $25,000 since September 9.
  3. 5326 Claxton Ave, St. Louis, Missouri (HUD): 2 bed, 1,178 sq ft, built 1924, $17,000.
  4. 337 W 110th Pl, Chicago, Illinois (HUD): 2 bed, 816 sq ft, built 1902, $16,000.
  5. 4552 Arlington Ave, St. Louis, Missouri (HUD): 1 bed, 912 sq ft, built 1927, $11,520.
  6. 615 N 85th St, East St. Louis, Illinois (HUD case 132-224148): 2 bed, 1 bath, 831 sq ft, built 1925, $4,000, bids accepted in rolling periods through February 22, 2027.

A listing at 2940 Lynnwood Cir SW, Decatur, Alabama, also showed $16,000 but had no bedrooms, bathrooms or square footage on record, so we left it out.

The catch

The $4,000 home is listed as uninsured, which means HUD expects repairs of more than about $5,000 and the home is not eligible for a standard FHA loan. Buyers would use cash, a conventional loan or an FHA 203(k) rehab loan. All of these homes are sold as-is with no seller repairs. Many are vacant and winterized with utilities off, so inspections can be difficult. HUD and Fannie Mae convey clear title, but a title search is still wise.

Two programs almost nobody uses

Good Neighbor Next Door: law enforcement officers, pre-K through 12th grade teachers, firefighters and EMTs can buy eligible HUD homes in revitalization areas at 50 percent off the list price. Buyers must live in the home as their only residence for 36 months, offer the exact list price, and are chosen by random lottery when several apply.
$100 down: owner-occupants who buy a HUD home with FHA-insured financing, including a 203(k) rehab loan, can qualify for a $100 down payment incentive. On FHA-insurable HUD homes, owner-occupants also get an exclusive bidding window of up to 30 days before investors can bid.

The all-in math (hypothetical)

Repairs are unknown until a contractor inspects a home, so this is an illustration only. If the Jamestown home at $17,000 needed $60,000 of work, the all-in cost would be $77,000, about a fifth of the U.S. median sale price of $389,601 (Redfin, October 29, 2026). With 3.5 percent down ($2,695), a $74,305 loan at Freddie Mac's 7.24 percent average 30-year rate would cost about $506 a month in principal and interest, before taxes, insurance and FHA mortgage insurance. Rehab budgets often run over, and resale values in some low-price areas are weak.

How to make an offer

  • Search HUD HomeStore and Fannie Mae HomePath for your state.
  • Work with a HUD-registered broker; HUD accepts offers only through one.
  • Get pre-approved, ideally with a lender that handles FHA 203(k) loans if the home needs work.
  • Inspect, then bid during the owner-occupant window if you will live in the home.

Watch the video

Government Is Selling Houses for $4,000: 6 Real Listings · Watch on YouTube

Sources

  1. GovAuctions.app, You can buy a house from the government for $4,000 (HUD, Fannie Mae and Freddie Mac listings; data as of November 2, 2026): govauctions.app
  2. GovAuctions.app listing, 615 N 85th St, East St. Louis, IL (HUD case 132-224148): govauctions.app
  3. GovAuctions.app listing, 41 W 13th St, Jamestown, NY (Fannie Mae HomePath): govauctions.app
  4. HUD, Good Neighbor Next Door fact sheet: hud.gov
  5. HUD Mortgagee Letter 2011-19, FHA $100 Down sales incentive: hud.gov
  6. HUD Mortgagee Letter 2022-01, owner-occupant exclusive listing period: archives.hud.gov
  7. 24 CFR 291.205, competitive sales of HUD properties: ecfr.gov
  8. HUD HomeStore: hudhomestore.gov

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