Step 8:

Appraisal and Repairs

 

Appraisal

Just like a normal transaction it is the responsibility of the buyer to order and pay for the appraisal through their lender of choice.

 

HUD has decided to no longer share or provide the previous appraisal order for price and escrow determination.

 

It is important to have the appraisal ordered and completed after home inspection is completed. Remember this must be completed within the 72 hour Utility activation time frame.

 

HUD will allow the cost of the appraisal to be included in the buyer requested closing cost and paid on the HUD1 if allowable by there lender.

 

HUD will pay certain closing costs up to three percent ( 3%) of the purchase price. Note: Certain closing costs. 

 

Costs paid by HUD not to exceed 3% if requested on line 5 of the 948 HUD Sales Contract

 

(Note: All the above can be paid if sufficient funds are on line 5)

 

Under the Buyer Select Program closing fees are the Buyer’s expense.

 

• HUD will pay only a portion of the closing fees if the buyer includes

closing costs on Line 5 of the sales contract when the bid is

submitted and there are sufficient funds remaining to allow for the fee

to be paid.

 

• If no closing costs are included in the bid submission to HUD, the

buyer will be required to pay all settlement and closing fees.

 

 

Note:

 

• If it is a standard practice and customary in a state, HUD will pay the

Deed recording fee, but Line 5 monies are used first. If there are no

Line 5 monies, then HUD will pay.

 

• There are additional allowable closing costs that may be paid by HUD

at closing if there are sufficient funds on Line 5 of the sales contract

to cover the expenses. 8

 

Click Here to Find Out more about HUD Allowable Closing Cost Assistance 

 

 

Repairs

 

HUD's currently policy is to make no repairs on HUD homes and to sell HUD homes “AS IS, WHERE IS”

 

Any Lender Required repairs will be the responsibility of the buyer and can be addressed through an FHA 203b or FHA 203K loan to finance required repairs escrows for minimum property standards. 

 

HUD Homes are sold in their "as-is" condition.

 

HUD does not warrant the condition of its properties and will not pay for the correction of defects or repairs.

 

Since the new owner will be responsible for making needed repairs, HUD strongly urges every potential homebuyer to get a professional inspection prior to submitting an offer to purchase.

 

Because of HUD's as-is policy, HUD Homes can often be a great opportunity for those homebuyers in search of a "fixer-upper". Not every HUD Home needs fixing up, but when one does, it can be a real bargain. For example, HUD's asking price on the home reflects the appraised value in its current ("as-is") condition, unless otherwise specified.

 

While HUD does not provide direct financing for the rehabilitation of REO properties, FHA does provide rehabilitation financing assistance through the 203(k) Rehabilitation Loan Program. Also, keep in mind that on most sales the buyer can request HUD to pay up to 3% of their financing and closing costs.

 

Click here to learn more about the 203B and 203K Programs.

 

 

 

Step 9.

Extensions and Cancelation