Listing and Bidding Procedures
HUD Homes are sold "As Is" without warranty.Irregularities in bids:
HUD reserves the right to waive any irregularity in any bid, reject any and all offers, and to withdraw a property prior to the bid opening.Code and Zoning violations:
Brokers should advise Purchasers that the properties may contain code and/or zoning violations. Code and Zoning status must be determined by the Purchaser.Property Condition:
No guaranties and/or warranties made. No repairs will be performed by HUD after closing. Purchasers are encouraged to have the properties inspected by a qualified home inspection service company to satisfy themselves as to the condition of the property.Potential Purchasers:
Contact a HUD Approved Broker to obtain a copy of the current listings, to visit listed homes or to make an offer.
HUD pays closing cost up to 3% of the purchase price, IF inserted on line 5 of the HUD Sales Contract when the electronic bid is submitted.
More information on BUYING A HUD HOME on the HUD website at:
Listing CodesIN - Insurable:
All properties listed as "INSURABLE" are eligible for FHA financing. All requests for insurance will be under Section 203(b) of the National Housing Act Program. An interest rate will be charged on the loan and is negotiable between the purchaser and lender. The mortgage may include some mortgage insurance payments.IE - Insurable with Escrow Repairs:
Properties listed as "INSURABLE WITH ESCROW REPAIRS" means that certain repairs (not to exceed $5,000.00) are required to meet Minimum Property Standards for an FHA mortgage. These properties can qualify for FHA Section 203(b) mortgages if the purchaser and lender establish a repair escrow at the closing for the completion of repairs within 90-days of the closing.UI - Uninsured:
Properties listed as "UNINSURED" means that certain repairs and or improvements are required to be eligible for an FHA 203(k) mortgage. The required repairs on most of these properties exceed $5000.00. Purchasers of these properties have the option to purchase "as-is" with cash or conventional financing. These properties are also eligible for an FHA 203(k) mortgage if the required repairs and or the improvements are completed within 90-days of the closing.Listing and Bidding
HUD Approved Brokers will show properties, prepare complete contracts and submit bids through Internet Electronic Bidding at the HUD Listings website.New listings are available daily.
During the Exclusive Listing Period, bids may be submitted only by Owner Occupant purchasers
, which HUD defines as owner-occupant purchasers, qualified nonprofit organizations and government entities. There will be:
• a fifteen (15) day Exclusive Listing Period for Owner Occupant purchasers for properties listed Insurable and Insurable with Escrow Repairs,
• a five (5) day Exclusive Listing Period for Owner Occupant purchasers for properties listed Uninsured.Exlusive Listing Period (Owner Occupant Priority)
• For Insurable and Insurable With Escrow properties, bids shall be opened and reviewed on the Tenth (10th) day of the Exclusive Listing Period. All bids will be treated as having been received
simultaneously. If no winning bid is received by the Tenth (10th) day, bids shall be opened and reviewed on each day after the tenth (10th) day up to the fifteenth (15th) day, or until a winning bid is received. If no winning bid is received in that fifteen (15) day period, the listing shall be extended to all buyers. See Extended Listing Period below.
• For Uninsurable properties, bids shall be opened and reviewed on the sixth (6th) day. All bids will be treated as having been received simultaneously. If no acceptable Owner Occupant net bid is received, the listing shall be extended to all buyers. See Extended Listing Period below.Extended Listing Period
At the conclusion of the Exclusive Listing Period, should a property remain unsold, all general public bids (including Investors) may be submitted daily.
Bid Opening, Review and Results
In order to be valid for bid opening on a specific day, bids must be completed and confirmed on the Internet no later than 11:59 p.m. on the previous day.
Bids received on the same day shall be considered to have been received simultaneously. Friday, Saturday and Sunday bids will be considered to have been received simultaneously and will be reviewed simultaneously on the following Monday.
Bids will be opened and reviewed each business day.
The highest acceptable net
bid to HUD will be selected.
Results will be posted each business day by 1:00 p.m.
REMINDER: Brokers must check the HUD Listings website on a daily basis for available properties and Bid Result Publication. If your bid is selected, Brokers must submit the original written and completed HUD Sales Contract along with the required Addenda to the appropriate AM Contractor office within the next 48 hours of Bid Result Publication otherwise the bid will be considered canceled and the second highest acceptable net bid to HUD will be considered.
To be acceptable, hard copies must contain no errors and done in BLUE ink
NOTE: If you search for a property and it does not show up in the search properties area then that property has an accepted bid at this time.
Required Contract DocumentsHUD SALES CONTRACT and REQUIRED ADDENDA:
Down Payment Owner
- Fillable HUD Sales Contract Form 9548 Revision (1/99)
- Attach the following Addenda:
- Lead Paint Addendum, if the property was built prior to 1978. The Lead Based Paint Addendum is property specific and will be posted with the property listing.
- General Addendum to HUD Sales Contract.
- For Your Protection: Get a Home Inspection.
- Notice to Purchaser Addendum when the offered amount exceeds the appraised value at the time the offer is submitted.
- Certification of Owner-Occupant, if purchaser is an owner-occupant.
- Radon Gas and Mold Notice and Release Agreement.
- Letter from a Financial Institution acknowledging that purchaser has funds available for down payment.
- Mortgage Pre-Qualification Letter from a lending institution, if the purchase is to be mortgaged, stating that an in-house credit check has been performed and the purchaser has been pre-qualified for a mortgage up to a specified mortgage amount.
- Certification from a Financial Institution, if the purchase is cash, stating that funds are available on the day of closing.
- Certification of Owner-Occupant Status for Cash Purchases: All bids by owner-occupants, who are purchasing properties listed in the owner-occupant category, must include an Owner-Occupant Certification. Sanctions will be immediately imposed upon Brokers, Agents and Investors found to be abusing the system.
3.5% Minimum Down payment for FHA financed properties.
Maximum mortgage amount 96.5% of the appraised value or sales price whichever is lower.Investors:
1 unit: 25% Minimum Down payment, for FHA financed properties;
2 to 4 units: 15% Minimum Down payment, for FHA financed properties.Earnest Money Deposit
Required Earnest Money:
Must be in the form of a cashier's check, money order, or other certified funds. The original Earnest Money check should be submitted with the sales contract after bid acceptance. The Earnest Money deposit will be sent to the Closing Agent after contract execution.
• $1,000 for offers greater than $50,000,
• $500 for offers $50,000 or less,
• 50% of the Listing Price for Vacant LotsEarnest Money Forfeiture and/or Return
The following provisions are applicable in all instances except those where HUD is unable or unwilling to close the sale, in which case the entire amount will be returned.Investor Purchasers:
• Uninsured Sales:
100% of the deposit will be forfeited to HUD for failure to close, regardless of the reason.
• Insured Sales:
Owner-Occupant Purchasers:Return 100% of the deposit when:
- 50% of the deposit will be forfeited to HUD for failure to close if the purchaser is determined by HUD to be an unacceptable buyer.
- 100% of the deposit will be forfeited to HUD if the sale fails to close for any other reason.
Return 50% of the deposit when:
- There has been a death in the immediate family (purchaser, spouse or children living in the same household).
- There has been a recent serious illness in the immediate family that has resulted in significant medical expenses or substantial loss of income, thus adversely, affecting the purchaser's financial ability to close the sale.
- There has been a loss of job by one of the primary breadwinners, or a substantial loss of income through no fault of the purchaser.
- For an FHA insured sale, HUD (or a D.E. underwriter) determines that the purchaser is not an acceptable borrower. For an uninsured sale, the purchaser was pre-approved for mortgage financing in an appropriate amount by a recognized lender and, despite good faith efforts, is unable to obtain mortgage financing. "Pre-approved" means a commitment has been obtained from a recognized mortgage lender for mortgage financing in a specified dollar amount sufficient to purchase the property.
- There is other equally good cause, as determined by AM Contractor, in keeping with the spirit and intent of the above policy.
For an uninsured sale, despite good faith efforts by the purchaser, there is an inability to obtain a mortgage loan from a recognized mortgage lender.Forfeit 100% of the deposit when:
- No documentation is submitted.
- Documentation fails to provide an acceptable cause for the buyer's failure to close.
- Documentation is not provided within a reasonable time following contract cancellation.
Vacant Lot Sales:
The purchaser is considered to be an investor and instructions pertaining to investors will apply.Closing Costs
HUD pays certain Closing Costs up to 3% of the purchase price, IF inserted of line 5 of the sales contract when the electronic bid is submitted.
Click here to view HUD Notice H-2009-17 explaining which closing costs are allowable and the maximum amount in your appropriate State.
Closing Time Frame
All purchasers must close on or before forty five (45) days of contract acceptance date.Closing Extension PolicyALL SALES ARE EXPECTED TO CLOSE WITHIN THE APPLICABLE TIME FRAME IDENTIFIED ON LINE 9 OF THE SALES CONTRACT.Closing Extension Request:
If the closing does not occur on the specified date on line 9 of the HUD Sales Contract 9548, the Broker should contact HUD's Closing Agent at least two weeks prior to that date to request an extension.
AM Contractors, as HUD's Representative, may grant an extension of closing time and, if approved, each extension will be for a period of fifteen (15) days:
• Submit the "Request For Extension of Closing Date" (Extension Request form) and all the required supplemental supporting documents to HUD's Closing Agent prior to the expiration of the sales contract. Click here for a copy of the Extension Request Form.
• Documentation submitted with the extension request must establish that a closing can reasonably be expected to occur within the extension period.
• The extension request must be accompanied by a cashier's check, money order or other certified funds in the appropriate amount and made payable to HUD. The fee is based on the Contract Sales Price:Contract Sales Price Extension Fee
Equal to or less than $25,000.00 $150.00 ($10.00 per day)
$25,000.01 to $50,000.00 $225.00 ($15.00 per day)
$50,000.01 and over $375.00 ($25.00 per day)
• The initial 15-day extension will be provided for owner occupant purchasers, at no cost, if documentation is provided indicating that proper and timely loan application was made, that the delayed closing is not the fault of the purchaser and that mortgage approval is imminent.
• The extension fee will be retained by HUD. In the event that the purchaser closes prior to the end of the extension period, the unused, prorated portion of the extension fee will be credited to the amount due at closing.
• The approval of an extension does not obligate AM Contractor, as HUD's Representative, to grant future extensions.Broker Registration and NAID
As Broker, Nonprofit, or Government Agency, you can make an offer on a HUD Home only if you have a HUD Name Address Identifier (NAID). To apply for a NAID, http://www.hudhomestore.com/hud/NaidRegistration.aspx
So in order to place a bid on a HUD property, you must have an active NAID. You may obtain a NAID by completing the necessary forms and providing all required attachments to the HUD Homeownership Center which has jurisdiction over the state in which you are located. The NAID application package must contain the documents as listed at http://www.hudhomestore.com/hud/NaidRegistration.aspx
. If your application package does not contain the required documents, the package will be returned and extend the processing time. The NAID application processing time is a minimum of 2 weeks.
For Selling Brokers: Only Selling Brokers may obtain a NAID. Real Estate Agents must use the NAID of their Selling Broker to submit bids.Broker Commission
HUD will pay up to 6% or a minimum of $2500 commission to be equally split between the Listing and Selling Broker, IF inserted on line 6a. of the new HUD Sales Contract Form 9548 (1/99).Help
"WHAT IF I NEED HELP?"
If you need help, you can obtain it several ways:
• You can go to http://www.HUDHomestore.com
• You can also call our office during the hours of 8:00 a.m. through 5:00p.m. eastern time at 864-489-6285.