HUD Home FAQ's


WHAT DO I NEED TO KNOW ABOUT BIDDING ON HUD HOMES?

All bids, on all HUD owned properties nationwide must be placed at www.HUDHomestore.com.

Only HUD registered brokerages may show, sell, and receive a commission on a HUD owned

property. State real estate contracts and addendums (this includes FHA Amendatory Clauses &

Real Estate Certifications) may NOT be used or incorporated into any HUD contract. Only

HUD contracts and addendums may be used and should be fully executed (IN BLUE INK

ONLY) and in the possession of the selling agent, along with proof of cash/prequalification letter

and certified escrow funds, BEFORE the bid is placed on HUD’ website.

Offers may NOT be faxed or emailed to the Neighborhood Listing Brokers. Bid results and

statistics are not placed on the website until a winning bidder’s contract has been fully ratified by

the seller. Only winners are notified via email of their winning bid status.

We are not able to give you status updates on your bids or contract packages, nor can we disclose

how many, or if, offers are currently on the property.

Ratified contracts can be expected via email within 7 to 10 business days. Selling brokers that

have been asked to make revisions can expect a slightly longer turn-around timeframe.

 

HOW DO I ACCESS HUD PROPERTIES?

All HUD owned properties should be vacant and on an electronic and/or combination lockbox.

There is no such thing as a single “HUD Key” any longer. While Neighborhood Listing Brokers

may verify your current and active SAMS NAID status, HUD does not require that you belong to

a REALTOR® and/or MLS association.

 

WHAT IS THE REQUIRED ESCROW DEPOSIT ON HUD PROPERTIES?

All BIDS on HUD owned properties require a CERTIFIED deposit of $500 ($50,000 or less) or

$1,000 ($50,001 or more) in the form of a cashier’s check or money order that must be payable

to HUD. Funds are mailed directly to the HUD asset manager with the original sales contract

package once you receive a winning bid notification.

 

WHAT ARE USUAL AND CUSTOMARY SELLER’S CLOSING COSTS ON HUD PROPERTIES?

HUD does NOT pay any closing costs other than the real estate commissions, recording of the

deed, and the HUD Closing Agent fee. Seller’s maximum contribution towards all closing costs

is 3%. Any unused portion of requested closing cost assistance will NOT be credited or given

back to the buyer upon closing.

 

WHAT KIND OF COMMISSION DOES HUD PAY?

At this time, HUD is offering a 3% commission; OR, in some cases a minimum commission to

the listing broker and the selling broker on all HUD owned properties. HUD may occasionally

offer bonuses at their discretion. You should always check the “addendums” link on HUD’s

website to keep abreast of current incentives. The commission, bonus, incentive, and/or

minimum commission may change at any time at HUD’s discretion. While the selling broker

may reduce their commission, the listing broker’s commission is non-modifiable.

 

DOES HUD PROVIDE SURVEYS, INSPECTIONS, AND HOA CERTIFICATES?

HUD does not have any previous surveys nor do they provide a current survey. One FHA

appraisal, termite inspection, and lead-based paint stabilization estimate will be provided to

owner-occupant, FHA purchaser’s only. Surveys, well, septic, structural, and mechanical

inspections/certifications; lead-based paint remediation over $4,000; and HOA

application/fees/certificates are at the sole expense of the buyer.

 

 

CAN REPAIRS AND/OR REMEDIATION BE DONE BY HUD OR THE BUYER BEFORE CLOSING?

At no time will any repairs, placement of personal possessions, or occupation of the property

before closing be allowed. Selling agents are required to accompany buyers, inspectors,

appraisers, etc. at every visit to the property, sign in on the sign in sheet, and ensure that the

property is properly secured when they leave. Further, lender required repairs and/or

remediation may NOT be performed before closing; nor will HUD allow a seller credit for, or

remediate, lender required repairs.

 

DOES HUD PAY FOR AND/OR COORDINATE UTILITY ACTIVATION FOR INSPECTIONS?

Neither HUD nor the Neighborhood Listing Broker will arrange or pay for any utility activation.

Selling agents are required to complete and submit Utility Activation Request Applications, fees,

and supporting documentation to the HUD Field Service Managers for their approval. All

utilities must be in the name of the buyer and/or selling agent for a period not to exceed 48

business hours. Outstanding utilities fees that would prohibit activation will not be paid before

closing for the purpose of conducting a home inspection. Rather, the buyer will be given the

option of proceeding with the home inspection WITHOUT the mechanical systems being

functional. Utility activation/requests cannot be made until the selling agent receives a fully

ratified contract from the HUD asset manager.

 

WHAT IF I MAKE A MISTAKE ON MY BUYER’S LEGAL INFORMATION ON THE CONTRACT?

Revisions to the contract can cause significant delays. Please ensure that you have your buyer’s

full, legal name(s), correct social security number(s), and type of financing. Erroneous

information can result in your buyer having to produce two (government issued) forms of

identification or cancellation of bid.

I JUST GOT A P260-HUD-Bid Acceptance Notice Email

from do-not-reply@HUDHomestore.com

Receipt of a winning bid notification via email does NOT mean that you have an “accepted”

offer or contract. Rather, your bid has been provisionally accepted subject to the receipt and

approval of original required documents as specified by each individual HUD asset manager

within TWO BUSINESS DAYS of the bid acceptance email. Contracts not received by the due

date or packages containing errors and/or omissions may be deemed “non-responsive”, canceled,

and the property placed back on the market or awarded to a back-up offer.

 

WHO SELECTS THE CLOSING ATTORNEY/TITLE COMPANY?

HUD retains designated closing agents for all closings on HUD owned properties. All closings,

even if your buyer elects to hire a 3rd party closing agent, must be coordinated through the HUD

closing agent following their closing guidelines. HUD does not allow mail-away closings. Your

buyer may elect a power of attorney but must submit the POA to the HUD designated closing

agent, and lender if obtaining financing, for their approval. HUD requires 7 (business) days

advance notice of a closing. This includes the receipt of closing instructions if your buyer is

obtaining financing. Closing funds must be in the form of a bank wire that must be in the HUD

designated closing agent’s bank account at or before closing. Certified funds on the day of

closing are not permitted. If buyers elect to do a final walk-through, their realtor must

accompany them through the property at least 6 business days in advance of scheduled closing

date.

 

DOES HUD ALLOW CONTRACT EXTENSIONS OR CHARGE PER DIEM FEES?

Each HUD asset manager has a contract extension form that is required a minimum of 5

(business) days in advance of the contract expiration date. Extensions, at the discretion of the

AM, are awarded in 15 day increments. Contract extensions must by accompanied by certified

extension funds and a letter from the lender (if obtaining financing) or the buyer (if paying

cash). The submission of an extension request does not automatically, or in any way obligate,

HUD to accept or extend the contract expiration date. Additionally, the approval of one

extension does not mean blanket approval for any further extensions. HUD will retain extension

fees if the sale fails to close. Free extension funds will still will be collected and deposited with

the original extension request. Funds will be mailed back to buyer after closing via regular mail

from the HUD designated closing agent.

 

WHAT IF MY BUYER WANTS OR NEEDS TO CANCEL?

Each HUD asset manager has a Contract Release and Earnest Money Disposition Request Form

that must be submitted with supporting documentation such as a formal lender declination before

the contract expiration date. Submission of the release form and supporting documentation does

not mean that the buyer will receive any portion of the escrow deposit back. Failure to submit

the contract release form with the proper supporting documentation before the contract expires

may result in automatic forfeiture of the entire escrow deposit at the HUD asset manager’s

discretion.

HOW DOES THE BUYER GET KEYS TO THE PROPERTY AFTER CLOSING?

Five days before the closing, Neighborhood Listing Brokers perform a Ready to Close inspection

that includes the removal of all signs, papers, and lockboxes. You and your buyer are

responsible for coordinating the replacement and/or rekeying of all locks on the property on the

day of closing. Neighborhood Listing Brokers cannot give buyers HUD keys. Please plan

accordingly.

MY BUYER HAS CLOSED ON A HUD PROPERTY AND THEIR PROPERTY TAXES HAVE GONE UP, WHY?

Buyers should not rely on HUD’s current property taxes as the amount of property taxes that the

buyer may be obligated to pay in the year subsequent to purchase. A change of ownership or

property improvements triggers reassessment of the property that could result in higher property

taxes and possible special assessments. If your buyer has any questions concerning valuation or

special assessments, they should contact the county property appraiser’s office for additional

information.

Please Note:

This page is only an  overview of HUD’s policies and procedures and it should not be

considered to be all inclusive or absolute.

If you would like additional information, please do not hesitate to contact us at 850-878-5589.