|
Frequently Asked Questions
How long do I have to close? What
if I need more time?
What is Officer/Teacher Next Door?
What is Firefighter - Emergency Medical Technician
Next Door?
Does HUD have special programs for Non-Profits and
Local Government Agencies?
Is there anything else I should know about HUD Homes?
On what holidays do you close your office?
What is FHA financing?
How is the repair escrow amount determined?
How do I determine the mortgage amount when there
is a repair escrow?
Will HUD pay for any closing costs and selling agent's
commission?
How long do I have to close? What
if I need more time?
Sales transactions shall close within the timeframe as specified on
your state/regional Forfeiture and Extension Policy (Addendum A, Rev
11-13-06). Closing timeframes are: (California and Georgia=45 days*);
(Hawaii, Guam, Northern Marianas=60 days). Properties may close in
less than the timeframe specified. However, the amount of days specified
above for your state/regional area MUST be entered on the HUD Sales
Contract. If closing does not occur within the timeframe then extension
fees will apply. The Broker must submit a written request for an extension
regardless of the reason for the delay in closing. The Extension Request
Form can be found in the forms section of this website and must be
accompanied by the extension fee. PEMCO will grant extension requests
on a case-by-case basis.
*With one exception, buyers will have 45 days to close
escrow regardless of the type of financing they use to purchase the
home. If a buyer purchases a home with 203(k) financing, the initial
escrow period is extended to 60 days at no additional cost to the buyer. back to top
What is Officer/Teacher Next Door?
One of HUD's Special Sales Program under the Good Neighbor Initiatives
is the Officer Next Door/Teacher Next Door (OND/TND) program. The
OND/TND Programs offers HUD-owned, single family homes that are located
in HUD designated Revitalization Areas will be made available to
Law Enforcement Officers and Teachers at a 50 percent discount of
the last listed price. When a law enforcement officer or teacher
chooses to use an FHA-insured mortgage, the down payment is $100.
When a governmental agency of nonprofit organization is the purchaser,
HUD expects that the full discount will be passed on to the law enforcement
officer or teacher. Officer Next Door/Teacher Next-Door program participants
are required to own and use their property as their sole residence
for at least three (3) years. Participants agree to execute a second
mortgage and note which will be for the amount of the discount which
HUD can call at a later date if the buyer fails to re-certify. During
the entire term (3 years), the buyer may NOT own ANY residential
real property other than the OND/TND home. Failure to comply with
this (or any OND/TND) requirement may result in the remaining balance
of the second mortgage becoming immediately due and payable. The
officer or teacher must submit a contract bid of 100 percent of the
listing price. Winning bidder will be chosen by lottery. The 50 percent
discount will be applied at closing. Teachers must be employed in
the school district that they purchase a home in under the Teacher
Next Door Program. More information on this program can be found
at http://www.hud.gov/offices/hsg/sfh/reo/goodn/main.cfm back to top
What is Firefighter - Emergency
Medical Technician Next Door?
Effective November 1, 2005, HUD announced the eligibility of firefighters
and emergency medical technicians to purchase HUD acquired homes located
in HUD designated revitalization areas at a discount, in accordance
with HUD's regulations for the Officer/Teacher Next Door (OND/TND)
Sales Program. Inclusion in the OND/TND program is designed to help
more firefighters and emergency responders become homeowners, and will
further the goals of the OND/TND Sales Program to accelerate the revitalization
of America's cities by promoting the integration of dedicated role
models and mentors into the community. More information can be found
at http://www.hudpemco.com/choose_specials.htm back to top
Does HUD have special programs
for Non-Profits and Local Government Agencies?
Another one of HUD's Special Sales Program under the Good Neighbor
Initiatives is the Direct Sales to Non-Profit Organizations and Government
Agencies. This special sales program under which approved non-profit
organizations and government agencies may purchase properties at discounted
prices for use in local housing or homeless programs. More information
on this program can be found at http://www.hud.gov/offices/hsg/sfh/reo/goodn/main.cfm back to top
Is there anything else I should
know about HUD Homes?
More information is available on HUD's website: http://www.hud.gov/offices/hsg/sfh/reo/reobuyfaq.cfm
Houses built before 1978 may have lead-based paint which can cause
harm to your family; so be sure to read about this hazard and about
what you would need to do to correct it. back to top
On what holidays do you close
your office?
Our offices are closed on the following Federal Holidays:
2007 Federal Holidays
January 1, 2007 - New Year's Day (Monday)
January 15, 2007 - Birthday of Martin Luther King, Jr. (Monday)
February 19, 2007 - Washington's Birthday (Monday)
May 28, 2007 - Memorial Day (Monday)
July 4, 2007 - Independence Day (Wednesday)
September 3, 2007 - Labor Day (Monday)
October 8, 2007 - Columbus Day (Monday)
November 12, 2007 - Veterans Day (Monday)
November 22, 2007 - Thanksgiving Day (Thursday)
December 25, 2007 - Christmas Day (Tuesday) back to top
What is FHA financing?
There are three main types of FHA Financing. More information may be
obtained from any mortgage company familiar with FHA Guidelines for
the various programs.
(1) 203(b) Regular FHA Loan - Listed as "IN"
• If the Property does not have any mandatory repairs FHA will
insure the Loan hence the classification of "IN"
(2) 203((b) - Repair Escrow - Listed as "IE"
• When a property has less than $5000 in repairs to bring it up
to Minimum Property Standards, FHA will insure the loan provided the
repairs are completed by the Buyer or the Buyer's agent within 90 days
from the date of Closing.
• It is a cost to the Buyer that the Buyer can finance and add
the amount to the mortgage.
• The Lender monitors and keeps the funds in an escrow account
for disbursement on completion of repairs to the Lender's satisfaction.
(3) 203(k) - Rehab Loan - Listed as "203K "
• When the property has more than $5000 in Minimum Property Standards
repairs to be done.
• The Lender must obtain an Inspection report from an approved
203(k) consultant and a new appraisal. back to top
How is the repair escrow amount
determined?
The FHA appraiser lists the estimated cost of repairs needed to bring
the property up to minimum FHA standards. This amount is then multiplied
by 110% and this amount is listed as the repair escrow amount. Example:
if repairs total 1,000.00 x 110% = 1,100.00. The Repair Escrow amount
will be listed at $1,100.00. back to top
How do I determine the mortgage
amount when there is a repair escrow?
The DE Underwriter will determine the final 203(b) mortgage amount.
The DE Underwriter will take into account the repair escrow amount
to determine the FHA loan amount. The DE underwriter will determine
this amount. Regardless of whether or not a repair escrow will be used
in the purchase of a home, the lines on the Sales Contract that request
the down payment amount and the secured mortgage amount should be filled
in "TBD" (To Be Determined). The line associated with the
length of the loan should also be filled in TBD. Please remember that
the repair escrow amount needs to be filled in only if the buyer is
using 203(b) repair escrow financing. back to top
Will HUD pay for any closing costs
and selling agent's commission?
HUD allows up to 5% Real Estate Commission. Although HUD may pay for
these costs, keep in mind that the higher the closing cost and commission
will reduce your Net to HUD and may affect your competitive bidding
ratio. For more information, ask your real estate agent or the listing
broker.
HUD will allow to be deducted from its proceeds,
purchaser financing and closing costs that are considered to be reasonable
and customary in the jurisdiction where the property is located.
In no event may these costs exceed 3% of the property's gross purchase
price. Please reference HUD Notice H2006-12 for additional information.
Please refer to page 2 of your state/regional Forfeiture and Extension
Policy for a list of the closing costs that will automatically be
paid by HUD and other closing costs that may be paid by HUD.
back to top
|
