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Frequently Asked Questions
En Español |
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How do I register to sell
HUD homes? What is Owner Occupant
Period? When can an Investor submit
a Bid? Where can I get a Sales
Contract package and where do I send it to? How do I get access to show
the property? Can I submit more than one bid
for different properties? 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? Why do I have to get a
Pre-Qualification Letter before I bid? 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? What is a HUD Home? When someone with a HUD insured
mortgage can't meet the payments, the lender forecloses on the home; HUD pays
the lender what is owed; and HUD takes ownership of the home. HUD then sells
the home at market value through a Marketing & Management Contractor such
as PEMCO. Any licensed real estate agent or
broker who is registered with HUD may sell HUD Homes. How do I register to sell HUD homes? The Principal Broker (designated broker)
for your company or office must register by completing SAMS (Single-Family
Acquired Asset Management System) forms 1111 and 1111A, and
attachments. All forms must be signed by the designated broker.
Registration must be renewed annually using the same forms to maintain
current status. Forms can be downloaded from this site and must be sent
to PEMCO. PEMCO will check the forms and attachments for completeness
and accuracy and forward them to HUD who processes them and issues the NAID number.
Please allow 6 to 8 weeks for processing. A NAID number is a Name Address
Identification Number issued by HUD. This number allows the agents and
brokers to submit bids on behalf of prospective buyers of HUD
homes. The M&M Contractor has engaged
Listing Brokers to list the properties in the local Listing Services
(MLS). They are paid a fee by the M&M Contractor. The Listing
Broker provides assistance to realtors with access to the property and with
sales information. To view a list of Listing Brokers
for your area , please click on one of the following links.
Anyone who can qualify for a
mortgage or who can pay cash may buy a HUD home. Owner occupants must
live in the house as their primary residence for at least one year and may
not purchase another HUD home as an Owner Occupant for two years.
Buyers must use a broker or agent who is registered with HUD to place a bid
on a property. Start by finding a participating
real estate agent. Your real estate agent must submit your bid for you.
Normally, HUD Homes are sold in an "Offer Period." At the end of
the Offer Period, all offers are opened and considered to be received
simultaneously, and, basically, the highest acceptable net bid is
accepted. If the home isn't sold in the initial Offer Period, you can submit
a bid until the home is sold. Bids can be submitted any day of the week,
including weekends and holidays. They will be opened the next business day.
The results from the review of all accepted bids are posted on our
website. It is the responsibility of the real estate agent to check our
website for accepted bid information and ensure that all the required forms
are properly filled out and sent to us within two business days of
acceptance. HUD homes are listed on our website
and in the local MLS. What is Owner Occupant Period? When
a HUD property is first listed for sale to the general public, bids can be
submitted by all potential purchasers, however, it is available to Owner
Occupant Purchasers “only” during the initial priority period as specified
below. All bids placed by Owner
Occupants that are submitted during this priority period are considered to
have been received as though they were received simultaneously. If there are no acceptable owner-occupant
bids on the last day of the priority period, then bidding becomes available
to all purchasers on a daily basis, with no priority given to owner/occupant
bids. What is Owner Occupant Period? When a HUD
property is first listed for sale to the general public, bids can be
submitted by all potential purchasers, however, it is available to Owner
Occupant Purchasers “only” during the initial priority period as specified
below. All bids placed by Owner
Occupants that are submitted during this priority period are considered to
have been received as though they were received simultaneously. If there are no acceptable owner-occupant
bids on the last day of the priority period, then bidding becomes available
to all purchasers on a daily basis, with no priority given to owner/occupant
bids.
When can an Investor submit a Bid? When
a HUD property is first listed for sale to the general public, bids can be
submitted by all potential purchasers (including investors), however, it is
available to Owner Occupant Purchasers “only” during the initial priority
period as specified above. All bids
placed by Owner Occupants that are submitted during this priority period are
considered to have been received as though they were received simultaneously. If there are no acceptable owner-occupant
bids on the last day of the priority period, then bidding becomes available
to all purchasers on a daily basis, with no priority given to owner/occupant
bids. Where can I get a Sales Contract package and where do I send it to? A complete Sales Contract Package
is provided on this website and our addresses are listed below. CALIFORNIA
– Sales PEMCO, LTD. dba PEMCO, REO LTD. 1600 Sacramento
Inn Way, Suite 220 Tel 916.927.7313
Fax 916.927.7454 GEORGIA - Sales 3525 Piedmont Rd.,
N.E. How do I get access to show the property? Contact the Local Listing Broker
nearest you. A list of local listing brokers is provided on this
website. Can I submit more than one bid for different properties? If an Owner Occupant submits
multiple bids for different properties PEMCO will select and award the bid
that has the highest acceptable Net to HUD for that property. How can I cancel my Bid? If you are awarded a property
either by Lottery or the General List, and you cannot complete the
transaction, you will need to submit the Electronic Bid Cancellation form
printed on your Broker’s letterhead. The cancellation form can be found
in the forms section of this website. 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. 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. 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. 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. To view the Forfeiture &
Extension Policy for your area of interest, please click on one of the
following links.
Bid Results (CB Area Only) –
whenever a bid is accepted, the results are posted on our website under “Bid
Results” the same day. By checking the Bid Results, the buyer’s agents
will then know to deliver the complete sales contract package within two
business days or 48 hours of acceptance to the designated M&M Contract
office. Bid Statistics (CB Area Only) –
information on what bids were received and whether they were acceptable are a
snapshot of all the bids submitted for a particular property irrespective of
the fact if the bid was accepted or not. Bid statistics are updated
every Friday for all bids submitted the previous week and will continue to
display for 60 days. Why do I have to get a Pre-Qualification Letter before I bid? A Pre-Qualification Letter must be
obtained prior to bidding on a property. This is to avoid having to tie
up the property with a transaction that is unlikely to close. The
Pre-Qualification letter must be directly from the lender (NOT the mortgage
broker) giving a current date and an amount of the loan that is
acceptable. It should also include the name the buyer(s) whose credit
report was reviewed and approved by the lender. For a list of HUD’s Closing Agents
in your area of interest, please click on one of the following links.
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:
( *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. 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
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 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
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. 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 - 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) |
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Last Update: 6-10-2007