"Cheap government houses" is really four different markets wearing similar names. Land banks, HUD homes, REO foreclosures, and tax sales each have a different seller, price logic, and process. Here's how to tell them apart — and which one the deals actually live in.
The four, side by side
| Seller | Typical price | How you buy | |
|---|---|---|---|
| Land bank | Local public agency | Back-tax level — often under $10k, side lots from $1 | Application, often with a rehab requirement |
| HUD home | HUD (federal) | Near market value | Bid through an approved broker on HUD Home Store |
| REO foreclosure | The bank that foreclosed | Near market value | Offer through an agent, close with a mortgage |
| Tax sale / auction | County treasurer | Varies; back taxes and up | Live or online auction, often sight-unseen |
Why land banks are the cheapest
The price gap comes down to motive. A bank selling an REO and HUD selling a foreclosed FHA home are both trying to recover a loan — so they price close to market. A land bank isn't recovering anything: it's a public agency whose job is to clear vacant, tax-delinquent property and get it back on the tax roll. It prices for reuse, which is why land bank inventory runs to a median around $3,000 and side lots go to neighbors for a dollar.
The trade-off is condition and process. HUD and REO homes are often livable and buyable with a mortgage. Land bank homes are usually renovation projects sold through an application, frequently with deadlines or owner-occupancy rules.
Land bank vs tax sale — the close cousins
These two get confused most because both start with tax foreclosure. The difference: a tax sale is the county auctioning delinquent property directly — often sight-unseen, with title risk you resolve yourself. A land bank is the agency that acquires that same property, clears the title, sometimes demolishes or maintains it, and resells it through a curated process. Land banks are the organized, lower-risk end of the same pipeline — our land bank vs tax sale vs foreclosure guide digs into the mechanics.
Which should you buy?
- Want a move-in-ready house with a mortgage? HUD or REO.
- Want the cheapest possible entry and can fund a renovation? Land bank.
- Experienced, cash-ready, and comfortable with title risk? Tax sales can be cheapest of all — but land banks give you most of the discount with far less risk.
For the cheap end done safely, land banks are usually the answer — and the live map is the only place to see every one of them at once.
