Answer: Sales transactions shall close within the time frame as specified on your state/regional Forfeiture and Extension Policy (Addendum A, Rev 11-13-06). Closing time frames are 45 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 is available on this website in the forms section and must be accompanied by the extension fee. AM’s will grant extension requests on a case-by-case basis.

Pemco’s website is: http://www.hudpemco.com/Request%20for%20extension.pdf    
BLB Resource Website is: https://www.blbresources.com/newdocs/2S%20Forms%20Portfolio.pdf

*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.** 1st extension is free with new FHA financing, form still required

Answer: 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.

Answer: Effective November 1, 2005, HUD announced the eligibility of firefighters and emergency medical technicians to purchase BUD 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.

Answer: 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.

Answer: More information is available on HUD’s website:
http://www.hud.gov/local/index.cfm?state=ca&;topic=homeownership. 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.

Answer: Our offices are closed on Federal Holidays.

Answer: 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.

Answer: 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.

Answer: 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.

Answer: HUD pays 3% Real Estate Commission.

LINE 5 of Contract: “Closing Cost Credit”
Closing 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.

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.